Poor wit needs cheerful period of decline (8)
I believe the answer is:
twilight
'period of decline' is the definition.
'poor wit needs cheerful' is the wordplay.
'poor' indicates an anagram.
'needs' means one lot of letters go next to another.
'cheerful' becomes 'light'.
'wit' with letters rearranged gives 'twi'.
'twi'+'light'='TWILIGHT'
(Other definitions for twilight that I've seen before include "Period just after sunset, becoming dark" , "Period of gradual decline or obscurity" , "Illumination at dusk" , "when it gets dark" , "period towards the end of the day?" .)