She is entertained by the queen in Surrey (5)
I believe the answer is:
esher
'in surrey' is the definition.
(I know that Esher located in the administrative territorial entity Surrey)
'she is entertained by the queen' is the wordplay.
'is entertained by' means one lot of letters goes inside another (entertain can mean to host or welcome in).
'the queen' becomes 'ER' (Elizabeth Regina ie Queen Elizabeth).
'she' going into 'er' is 'ESHER'.
(Other definitions for esher that I've seen before include "Town SW of London" , "Town near Sandown Park" , "Surrey town and racecourse" , "Surrey town, home of Sandown Park" , "somewhere in Surrey" .)