Greek city in the Adriatic or in Thessaly (7)
I believe the answer is:
corinth
'greek city' is the definition.
(I've seen this before)
'in the adriatic or in thessaly' is the wordplay.
'in' says the answer is hidden in the clue.
'CORINTH' is hidden within 'adriatic or in thessaly'.
(Other definitions for corinth that I've seen before include "Region of ancient Greece" , "Greek Gulf, isthmus city" , "City of Greece" , "Ancient Greek city" , "Mediterranean port" .)