Crossword Genius

Unstable state of gran surrounded by naked people (6,8)

Ross

I believe the answer is:

banana republic

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'unstable state' is the definition.
(I know that banana republic is a type of unstable state)

'of gran surrounded by naked people' is the wordplay.
'of gran' becomes 'anan' (I can't explain this - if you can you should give a lot more credence to this answer).
'surrounded by' is an insertion indicator.
'naked' becomes 'bare' (without clothing).
'people' becomes 'public'.
'anan' put within 'bare' is 'bananare'.
'bananare'+'public'='BANANA REPUBLIC'

Can you help me to learn more?

(Other definitions for banana republic that I've seen before include "Small state dependant on one export" , "Small politically unstable country dominated by foreign companies" , "weak state" , "state precariously run" .)

I've seen this clue in The Times.
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