To rally crowd, I tell a story about head of state (8)
I believe the answer is:
mobilise
'to rally' is the definition.
(I've seen this before)
'crowd i tell a story about head of state' is the wordplay.
'crowd' becomes 'mob' (mob can mean a crowd of people).
'tell a story' becomes 'lie' (to tell stories is to lie).
'about' is an insertion indicator.
'head of' indicates taking the first letters.
The first letter of 'state' is 's'.
'lie' placed around 's' is 'lise'.
'mob'+'i'+'lise'='MOBILISE'
(Other definitions for mobilise that I've seen before include "Prepare for war" , "rally" , "Make ready for action, troops for war perhaps" , "18d [GET READY]" , "Marshal" .)