Islander thanks Scotsman drinking punch (8)
I believe the answer is:
tahitian
'islander' is the definition.
(someone from Tahiti)
'thanks scotsman drinking punch' is the wordplay.
'thanks' becomes 'ta' (UK informal version of 'thank you').
'scotsman' becomes 'ian' (common Scottish name).
'drinking' indicates putting letters inside (inserted letters are consumed or drunk).
'punch' becomes 'hit' (I've seen this in another clue).
'ta'+'ian'='taian'
'taian' placed around 'hit' is 'TAHITIAN'.
(Other definitions for tahitian that I've seen before include "From French Polynesia" , "It, in a hat (anag)" , "One from Papeete" , "Native of South Pacific island, capital Papeete" , "someone on tropic island" .)