The story is good - set in the City (4)
I believe the answer is:
epic
'the story' is the definition.
(I have seen 'Heroic story' mean 'epic' so perhaps 'story' could also mean 'epic')
'good set in the city' is the wordplay.
'good' becomes 'pi' (old-fashioned term for pious).
'set in' indicates putting letters inside.
'the city' becomes 'EC' (the City of London postcode).
'pi' inserted within 'ec' is 'EPIC'.
'is' is the link.
(Other definitions for epic that I've seen before include "Long poem, book, film" , "eg Beowulf" , "Long poem telling of great events" , "Long account" , "Long poem - awesome!" .)