School sited between Derby and Oxford, initially (4)

I believe the answer is:

eton

'school' is the definition.
(famous UK public school)

I don't understand the rest of the clue.

(Other definitions for eton that I've seen before include "Famous college" , "College in Berkshire" , "Public school founded in 1440" , "Public school near Windsor" , "Public school (sounds like 20)" .)

I've seen this clue in The Guardian.

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