Fantastic story can spread in capital city (7)

I believe the answer is:

romance

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'fantastic story' is the definition.
'romance' can be an answer for 'story' (romance is a kind of story). I'm not sure about the 'fantastic' bit.

'can spread in capital city' is the wordplay.
'spread' indicates an anagram.
'in' is an insertion indicator.
'capital city' becomes 'rome' (capital of Italy).
'can' anagrammed gives 'anc'.
'anc' put inside 'rome' is 'ROMANCE'.

Can you help me to learn more?

(Other definitions for romance that I've seen before include "Amorous relationship" , "Novel - affair" , "Affair of the heart" , "Feeling of mystery; love affair" , "fairy story?" .)

I've seen this clue in The Times.

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