Setting location by railway (7)
I believe the answer is:
scenery
'setting' is the definition.
(thesaurus)
'location by railway' is the wordplay.
'location' becomes 'scene' (scene is a kind of location).
'by' says to put letters next to each other.
'railway' becomes 'ry' (abbreviation for railway).
'scene'+'ry'='SCENERY'
(Other definitions for scenery that I've seen before include "Stage setting" , "movie sets?" , "episode" , "Stage backdrop, perhaps" , "Theatre stage feature" .)