Large town following legend's wisdom (8)
I believe the answer is:
sagacity
'wisdom' is the definition.
(sagacity is a kind of wisdom)
'large town following legend's' is the wordplay.
'large town' becomes 'city' (I've seen this before).
'following' is a charade indicator (letters next to each other).
'legend' becomes 'saga' (I've seen this before).
'city' put after 'saga' is 'SAGACITY'.
(Other definitions for sagacity that I've seen before include "of judgments" , "showing wisdom" , "Good judgement, wisdom or shrewdness" , "Astuteness" , "good judgment?" .)