Somewhere to live a bit in Panama, say (7)
I believe the answer is:
habitat
'somewhere to live' is the definition.
I can't judge whether this definition defines the answer.
'a bit in panama say' is the wordplay.
'in' indicates putting letters inside.
'panama say' becomes 'hat' (Panama is a type of hat).
'a'+'bit'='abit'
'abit' placed within 'hat' is 'HABITAT'.
Can you help me to learn more?
(Other definitions for habitat that I've seen before include "Natural home or haunt" , "Shop founded by Terence Conran" , "Natural environment, plant or animal" , "Home ground of an animal" , "Domain" .)