Heard dog barking in this town (8)
I believe the answer is:
drogheda
'town' is the definition.
(I have seen 'Irish town' mean 'drogheda' so perhaps 'town' could also mean 'drogheda')
'heard dog barking' is the wordplay.
'barking' is an anagram indicator (UK slang for mad).
'heard'+'dog'='hearddog'
'hearddog' anagrammed gives 'DROGHEDA'.
'in this' acts as a link.
(Other definitions for drogheda that I've seen before include "Irish place" , "somewhere in Ireland" , "Goad herd into Louth town" , "Irish town" , "Irish port" .)