Lived with woodcutter from the east (3)
I believe the answer is:
was
'lived' is the definition.
('be' can be a synonym of 'live')
'woodcutter from the east' is the wordplay.
'woodcutter' becomes 'saw'.
'from the east' says the letters should be written backwards.
'saw' backwards is 'WAS'.
'with' acts as a link.
(Other definitions for was that I've seen before include "Lived" , "(He/she/it) existed" , "Is no longer" , "(I/he) existed" , "Existed in the past" .)