Crossword Genius

It was a capital little place (3)

Ross

I believe the answer is:

rio

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'place' is the definition.
(I have seen 'place of carnival' mean 'rio' so perhaps 'place' could also mean 'rio')

I don't understand the rest of the clue.

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(Other definitions for rio that I've seen before include "- Ferdinand, footballer" , "A Mexican river, may be grande" , "place of carnival" , "The ... Grande borders Texas and Mexico" , "Manchester United player in South American city, in short?" .)

I've seen this clue in the Evening Standard.
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