Fancy ring given to a king on retirement (7)
I believe the answer is:
chimera
'fancy' is the definition.
(thesaurus)
'ring given to a king on retirement' is the wordplay.
'ring' becomes 'chime' (I've seen this before**).
'given to' says to put letters next to each other.
'king' becomes 'r' (r is abbreviation for rex).
'on retirement' shows that the letters should be reversed in order.
'a'+'r'='ar'
'ar' back-to-front is 'ra'.
'chime'+'ra'='CHIMERA'
(Other definitions for chimera that I've seen before include "Illusory aim; monster" , "Race him (anag.)" , "Vain, foolish, or incongruous fancy" , "Imaginary monster" , "Creature such as a gryphon" .)