Cancellation includes room (4)
I believe the answer is:
cell
'room' is the definition.
(cell is a kind of room)
'cancellation includes' is the wordplay.
'includes' indicates a hidden word.
'CELL' can be found hidden inside 'cancellation'.
(Other definitions for cell that I've seen before include "Dungeon" , "American mobile" , "may be wet or dry?" , "Spreadsheet unit" , "Where a prisoner is kept" .)