Revolutionary prison in low European territory (6)

I believe the answer is:

monaco

I'm a little stuck... Click here to teach me more about this clue!

'european territory' is the definition.
'Monaco' can be an answer for 'territory' (Monaco is an example). I'm not certain of the 'european' bit.

'revolutionary prison in low' is the wordplay.
'revolutionary' says the letters should be written backwards.
'prison' becomes 'can' (the can is American slang for prison).
'in' means one lot of letters goes inside another.
'low' becomes 'moo' (both can mean to make a cow noise).
'can' back-to-front is 'nac'.
'nac' inserted inside 'moo' is 'MONACO'.

Can you help me to learn more?

(Other definitions for monaco that I've seen before include "State of the Grimaldis" , "Monte Carlo country" , "Prince Rainier's kingdom" , "Home of the Grimaldis" , "Principality within France" .)

I've seen this clue in The Independent.

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