Monarch embodies a musical gift (3)
I believe the answer is:
ear
'musical gift' is the definition.
(a talented musician has 'the ear')
'monarch embodies a' is the wordplay.
'monarch' becomes 'er' (abbreviation for Elizabeth Regina**).
'embodies' means one lot of letters goes inside another.
'er' enclosing 'a' is 'EAR'.
(Other definitions for ear that I've seen before include "Place for a plug" , "'Give every man thine ..., but few thy voice' (Hamlet)" , "Bit of corn" , "Musical appreciation" , "Seed-bearing spike" .)