Racing town? (5)

I believe the answer is:

derby

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This clue could be a double definition.

'racing' is the first definition.
Although both the answer and definition are singular nouns, I don't understand how they can define each other.

'town?' is the second definition.

Can you help me to learn more?

(Other definitions for derby that I've seen before include "Local game" , "Flat race; hat" , "20 horse 12" , "Team" , "Hat, race and local match" .)

I've seen this clue in The Guardian.

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