Ionic, as translated, reveals historic location (7)

I believe the answer is:

nicosia

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But I can't explain it at all! Could you help me understand?

(Other definitions for nicosia that I've seen before include "It's capital in Cyprus (7)" , "Casino I visit in Cyprus" , "European Union's most southerly capital" , "Casino I used in Cyprus" , "Mediterranean city" .)

I've seen this clue in The Sun.

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