Parties seen round university and its grounds (6)
I believe the answer is:
campus
'grounds' is the definition.
(I have seen 'Grounds of college' mean 'campus' so perhaps 'grounds' could also mean 'campus')
'parties seen round university' is the wordplay.
'parties' becomes 'camps' (both can mean sides in a dispute).
'seen round' is an insertion indicator.
'university' becomes 'u' (abbreviation for university).
'camps' going around 'u' is 'CAMPUS'.
'and its' acts as a link.
I am not very happy about this link. Some or all of it may belong to another bit of the clue.
(Other definitions for campus that I've seen before include "university position" , "Higher education sector" , "educational location" , "Grounds of university or college" , "student quarters" .)