Queen's up to something in retreat with Ian -- naughty! (7)
I believe the answer is:
titania
'queen's' is the definition.
(fairy queen)
'up to something in retreat with ian naughty' is the wordplay.
'up to something' becomes 'at it' (I've seen this before).
'in retreat' is a reversal indicator.
'with' says to put letters next to each other.
'naughty' indicates anagramming the letters.
'atit' reversed gives 'tita'.
'ian' with letters rearranged gives 'nia'.
'tita'+'nia'='TITANIA'
(Other definitions for titania that I've seen before include "Oberon's better half?" , "Fairy Queen (MND)" , "Shakespeare's fairy queen" , "Wife of Oberon (MND)" , "Queen of fairyland" .)