Where one lives a little in Panama? (7)
I believe the answer is:
habitat
'where one lives' is the definition.
'a little in panama?' is the wordplay.
'a little' becomes 'abit' (synonyms).
'in' indicates putting letters inside.
'panama?' becomes 'hat' (panama is a kind of hat).
'abit' placed into 'hat' is 'HABITAT'.
(Other definitions for habitat that I've seen before include "place haunted" , "Shop founded by Terence Conran" , "British retailer" , "Natural home or haunt" , "Environment in which groups normally live" .)