Small church, or one inside glass (8)
I believe the answer is:
schooner
'glass' is the definition.
(schooner is a kind of glass)
'small church or one inside' is the wordplay.
'small' becomes 's' (abbreviation - e.g. clothes size).
'church' becomes 'ch' (common abbreviation).
'inside' indicates putting letters inside.
'or' placed around 'one' is 'ooner'.
's'+'ch'+'ooner'='SCHOONER'
(Other definitions for schooner that I've seen before include "wooden vessel" , "Sailing vessel - drinking vessel" , "Sailing vessel used in former times" , "In the main it is" , "Type of glass" .)