People regularly touchy about trophy (6)
I believe the answer is:
occupy
'people' is the definition.
(both can mean to populate or reside in)
'regularly touchy about trophy' is the wordplay.
'regularly' indicates alternate letters (regularly take one letter, leave next etc.).
'about' is an insertion indicator.
'trophy' becomes 'cup' (cup is a kind of trophy).
The alternating letters of 'touchy' are 'ocy'.
'ocy' placed around 'cup' is 'OCCUPY'.
(Other definitions for occupy that I've seen before include "Fill; keep busy" , "Take over - live in" , "Be present in" , "Fill up; hold (a position)" , "Take up residence" .)