Woman of lunacy (3)
I believe the answer is:
una
'woman' is the definition.
'of lunacy' is the wordplay.
'of' says the answer is hidden in the clue.
'UNA' is hidden in the letters of 'lunacy'.
(Other definitions for una that I've seen before include "A single Spanish" , "lady" , "She's one in Italy." , "- - Stubbs, comedy actress" , "woman" .)