Panama, say, has a section in environment (7)
I believe the answer is:
habitat
'environment' is the definition.
(I know that habitat is a type of environment)
'panama say has a section' is the wordplay.
'panama say' becomes 'hat' (Panama is a type of hat).
'has' indicates putting letters inside.
'section' becomes 'bit' (both can mean part).
'a'+'bit'='abit'
'hat' going around 'abit' is 'HABITAT'.
'in' is the link.
(Other definitions for habitat that I've seen before include "Bath at 1? (anag)" , "Natural home of an organism" , "Territory" , "place haunted" , "Environment in which groups normally live" .)