Republic created by the ancient people (5)
I believe the answer is:
yemen
'republic' is the definition.
(Yemen is a republic)
'by the ancient people' is the wordplay.
'by' says to put letters next to each other.
'the ancient' becomes 'ye' (resembles a historical spelling of 'the').
'people' becomes 'men' (men are people).
'ye'+'men' is 'YEMEN'.
'created' is the link.
(Other definitions for yemen that I've seen before include "Republic sited on the SW corner of Arabia" , "Aden is found here" , "Republic on the Arabian Peninsula" , "Enemy country in S Arabian peninsula" , "Arabian country, capital San'a" .)