Inhabitants in location work with university (8)
I believe the answer is:
populace
'inhabitants' is the definition.
(I've seen this before)
'in location work with university' is the wordplay.
'in' indicates putting letters inside.
'location' becomes 'place' (a location is a place).
'work' becomes 'op' (abbreviation for opus).
'with' is a charade indicator (letters next to each other).
'university' becomes 'U' (abbreviation for university).
'op'+'u'='opu'
'place' placed around 'opu' is 'POPULACE'.
(Other definitions for populace that I've seen before include "Residents" , "General public" , "Citizens" , "People generally" , "Masses" .)