Many dwell on this anagram made by setter (6)
I believe the answer is:
street
'many dwell on this anagram' is the definition.
Although both the answer and definition are singular nouns, I don't see how they can define each other.
'made by setter' is the wordplay.
'made by' indicates anagramming the letters (another word made by the same letters).
'setter' with letters rearranged gives 'STREET'.
Can you help me to learn more?
(Other definitions for street that I've seen before include "See 7" , "Tester (anag.)" , "Perry's Della" , "A thoroughfare or public road" , "Form of theatre" .)