Nancy's in Lima wearing enchantress's ring (8)
I believe the answer is:
encircle
'ring' is the definition.
('encircle' can be a synonym of 'ring')
'nancy's in lima wearing enchantress's' is the wordplay.
'nancy's in' becomes 'en' ('in' in French, spoken in the city of Nancy).
'lima' becomes 'l' (phonetic alphabet: alpha, bravo, charlie etc.).
'wearing' means one lot of letters goes inside another.
'enchantress' becomes 'circe' (figure of Greek myth).
'l' put within 'circe' is 'circle'.
'en'+'circle'='ENCIRCLE'
(Other definitions for encircle that I've seen before include "Contain" , "Ring round" , "Surround" .)