Toil working with clay in neighbourhood (8)
I believe the answer is:
locality
'neighbourhood' is the definition.
(I know that neighbourhood can be written as locality)
'toil working with clay' is the wordplay.
'working with' indicates an anagram (working with the letters).
'toil' with its letters mixed up with 'clay' makes 'LOCALITY'.
'in' acts as a link.
(Other definitions for locality that I've seen before include "Surrounding region" , "Neighbourhood or site of something" , "Area, neighbourhood" , "Position; area" .)