State has popular princess (7)
I believe the answer is:
indiana
'state' is the definition.
(Indiana is an example)
'popular princess' is the wordplay.
'popular' becomes 'in'.
'princess' becomes 'diana' (I have seen 'British princess' mean 'diana' so perhaps 'princess' could also mean 'diana').
'in'+'diana'='INDIANA'
'has' is the link.
(Other definitions for indiana that I've seen before include "___ Jones, Harrison Ford hero - US state" , "US Midwest state" , "State south of Lake Michigan" , "Vice President Pence's state" , "--- Jones, Harrison Ford film character" .)