Smart dame working in capital city (9)
I believe the answer is:
amsterdam
'capital city' is the definition.
(I've seen this before)
'smart dame working' is the wordplay.
'working' is an anagram indicator.
'smart'+'dame'='smartdame'
'smartdame' anagrammed gives 'AMSTERDAM'.
'in' acts as a link.
(Other definitions for amsterdam that I've seen before include "diamond-cutting centre" , "place of canals" , "Dutch port" , "Dutch capital" , "City of the Rijks-museum and Van Gogh Museum" .)