Separate good people within group (7)
I believe the answer is:
segment
'separate' is the definition.
(segmenting is a kind of separating)
'good people within group' is the wordplay.
'good' becomes 'g' (abbreviation).
'people' becomes 'men' (man is a kind of person).
'within' indicates putting letters inside.
'group' becomes 'set' (set is a kind of group).
'g'+'men'='gmen'
'gmen' inserted inside 'set' is 'SEGMENT'.
(Other definitions for segment that I've seen before include "Gets men with part cut off" , "Division" , "One of several parts of a whole" , "Part of a circle cut off by a chord" , "(Divided-up) part" .)