Nappy back in John? (5)

I believe the answer is:

terry

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'nappy' is the definition.
(terry is a type of nappy)

I cannot understand how the rest of the clue works.

(Other definitions for terry that I've seen before include "Terence (dim.)" , "(Rhyming) man's name" , "Loop of pile fabric; England footballer" , "Cotton pile fabric used for towels and bath robes" , "Cloth to make towels" .)

I've seen this clue in The Independent.

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