Island created by Gershwin (7)
I believe the answer is:
madeira
'island' is the definition.
(I know that Madeira is a island)
'created by gershwin' is the wordplay.
'created' becomes 'made' (making is a kind of creating).
'by' is a charade indicator (letters next to each other).
'gershwin' becomes 'ira' (lyricist Ira Gershwin, brother of George).
'made'+'ira'='MADEIRA'
(Other definitions for madeira that I've seen before include "Atlantic island, famed for its sweet wine" , "Island in the Atlantic Ocean" , "Islands in the Stream?" , "Sponge-cake" , "Portuguese North Atlantic island" .)