Tense chap residing in large land mass — or small land mass (8)
I believe the answer is:
tasmania
'small land mass' is the definition.
(Australian island)
'tense chap residing in large land mass' is the wordplay.
'tense' becomes 't' (grammatical abbreviation).
'chap' becomes 'man' (chap can mean a man).
'residing in' indicates putting letters inside.
'large land mass' becomes 'asia' (continent).
'man' inserted within 'asia' is 'asmania'.
't'+'asmania'='TASMANIA'
'or' acts as a link.
(Other definitions for tasmania that I've seen before include "Asian ATM in Australian federation" , "Aussie's state" , "Van Diemen's Land" , "Australian island state" , "Australian island to south of Bass Strait" .)