Give way, leaving space demarcated (4)
I believe the answer is:
cede
'give way' is the definition.
(thesaurus)
'leaving space demarcated' is the wordplay.
'leaving' indicates a hidden word (the answer must leave the confines of the clue).
'CEDE' can be found hidden inside 'space demarcated'.
(Other definitions for cede that I've seen before include "Surrender or yield" , "Allow" , "Give up (territory)" , "Surrender, give up" , "Give away" .)