Powder used in capital city (4)
I believe the answer is:
talc
'powder' is the definition.
(I know that talc is a more specific form of the action powder)
'in capital city' is the wordplay.
'in' indicates a hidden word.
'TALC' can be found hidden inside 'capital city'.
'used' acts as a link.
(Other definitions for talc that I've seen before include "Baby powder" , "Mineral used as a toiletry" , "Bathroom dusting powder" , "Softest mineral on Mohs hardness scale" , "Powdered mineral" .)