Island academy in a tree (4)
I believe the answer is:
guam
'island' is the definition.
(Guam is an example)
'academy in a tree' is the wordplay.
'academy' becomes 'a' (abbreviation for academy).
'in' indicates putting letters inside.
'a tree' becomes 'gum' (gum is a kind of tree).
'a' inserted inside 'gum' is 'GUAM'.
(Other definitions for guam that I've seen before include "NW Pacific island with large US base" , "North Pacific island, base for the US navy and air force" , "Largest of the Mariana Islands" , "US unincorporated territory in the western Pacific" , "Island in the West Pacific" .)