Put peg in instrument (6)
I believe the answer is:
spinet
'instrument' is the definition.
(spinet is a historical type of musical instrument)
'put peg in' is the wordplay.
'put' becomes 'set' (both can mean to place or position).
'peg' becomes 'pin' (synonyms).
'in' is an insertion indicator.
'set' enclosing 'pin' is 'SPINET'.
(Other definitions for spinet that I've seen before include "organ" , "Step in with old musical instrument" , "Small 12" , "A small harpsichord of old" , "Type of early harpsichord" .)