Monks and nuns may dwell this way (7)
I believe the answer is:
inhabit
'dwell this way' is the definition.
'inhabit' can be an answer for 'dwell' ('inhabit' can be a synonym of 'dwell'). I am not sure about the 'this way' bit.
I don't understand how the rest of the clue works.
Can you help me to learn more?
(Other definitions for inhabit that I've seen before include "Occupy - settle" , "people" , "Dwell in" , "Live in (a place)" , "Live in, occupy" .)