Colonel turns up with friend nearby (7)
I believe the answer is:
Here is my best explanation:
'nearby' is the definition.
(I've seen this before)
'colonel turns up with friend' is the wordplay.
'colonel' becomes 'col'.
'turns up' says the letters should be written backwards.
'with' says to put letters next to each other.
'friend' becomes 'ally' (I've seen this before).
'col' backwards is 'loc'.
(Other definitions for locally that I've seen before include "Within a particular area", "Nearby", "In the immediate neighbourhood", "Happening in neighbouring district", "In the surrounding area", "In the vicinity" and "Near home".)