Island goat refusing grain (5)
I believe the answer is:
capri
'island' is the definition.
(Italian island)
'goat refusing grain' is the wordplay.
'goat' becomes 'Capricorn' (the goat in the zodiac).
'refusing' indicates named letters should be taken away.
'grain' becomes 'corn' (corn is a kind of grain).
'capricorn' with 'corn' removed is 'CAPRI'.
(Other definitions for capri that I've seen before include "Romantic and expensive island in Bay of Naples" , "popular resort" , "Island home of G. 24" , "I carp about the island" , "found in Tyrrhenian location" .)