State hidden in former Princess (7)
I believe the answer is:
indiana
'state hidden in former princess' is the definition.
'indiana' can be an answer for 'state' (US state). I am not sure about the 'hidden in former princess' bit.
'in former princess' is the wordplay.
'former princess' becomes 'diana' (I have seen 'British princess' mean 'diana' so perhaps 'princess' could also mean 'diana'. I am not sure about the 'former' bit.).
'in'+'diana'='INDIANA'
Can you help me to learn more?
(Other definitions for indiana that I've seen before include "-- Jones, Harrison Ford role" , "Vice President Pence's state" , "American state" , "State south of Lake Michigan" , "Character associated with the Temple of Doom" .)