Degenerate nation imprisoning a grand knight (8)
I believe the answer is:
stagnate
'degenerate' is the definition.
(thesaurus)
'nation imprisoning a grand knight' is the wordplay.
'nation' becomes 'state' (synonyms).
'imprisoning' is an insertion indicator.
'grand' becomes 'G' (G is short for ground as in a thousand).
'knight' becomes 'N' (chess abbreviation).
'a'+'g'+'n'='agn'
'state' placed around 'agn' is 'STAGNATE'.
(Other definitions for stagnate that I've seen before include "remain motionless" , "Become inactive (and malodorous)" , "Stand still and become dull" , "Become brackish or sluggish" , "Cease activity" .)