Story a Ted once made up (8)
I believe the answer is:
anecdote
'story' is the definition.
(an amusing or interesting story)
'a ted once made up' is the wordplay.
'made up' is an anagram indicator.
'ted'+'once'='tedonce'
'tedonce' is an anagram of 'necdote'.
'a'+'necdote'='ANECDOTE'
(Other definitions for anecdote that I've seen before include "Short account of an incident" , "A short tale, usually true" , "Short enteryaining tale" , "Neat code (anag.)" , "Short entertaining story" .)