Funny people require understanding (4)

I believe the answer is:

wits

I'm a little stuck... Click here to teach me more about this clue!

'funny people' is the definition.
'wits' can be an answer for 'people' (I have seen 'Humorous people ' mean 'wits' so perhaps 'people' could also mean 'wits'). I'm unsure of the 'funny' bit.

I cannot understand how the rest of the clue works.

Can you help me to learn more?

(Other definitions for wits that I've seen before include "Wags, quipsters" , "Mental faculties" , "Humorous people" , "Canniness" , "Intelligence" .)

I've seen this clue in The Globe and Mail.

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