It was used for building the holy city? Wrong (7)
I believe the answer is:
meccano
'it was used for building' is the definition.
(old-fashioned construction toy)
'holy city? wrong' is the wordplay.
'holy city?' becomes 'mecca' (Islamic holy city).
'wrong' becomes 'no' ('no' can mean what just someone said is wrong).
'mecca'+'no'='MECCANO'
'the' acts as a link.
(Other definitions for meccano that I've seen before include "Plaything" , "Material to construct" , "Building material" , "Metal model construction set" , "Children's nuts and bolts kit" .)