Ground lies surrounded by water (4)

I believe the answer is:

isle

'surrounded by water' is the definition.
(an isle is surrounded by water)

'ground lies' is the wordplay.
'ground' indicates an anagram (grind the letters ).
'lies' anagrammed gives 'ISLE'.

(Other definitions for isle that I've seen before include "Such as Man or Bute" , "Ireland, perhaps" , "Anglesey, say" , "eg Man, Wight" , "eg Thanet" .)

I've seen this clue in The Guardian.

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