Play with sword in castle (7)
I believe the answer is:
windsor
'castle' is the definition.
(I know that Windsor is a castle)
'play with sword in' is the wordplay.
'play with' is an anagram indicator (I've seen 'plays with' mean this (I've seen this in other clues)).
'sword'+'in'='swordin'
'swordin' is an anagram of 'WINDSOR'.
(Other definitions for windsor that I've seen before include "Royal house (or castle)" , "Queen's Berkshire residence" , "Thames town" , "town near Eton" , "Berkshire castle" .)