Clue: Palace turned over City and Gunners (exaggerating player B's input) (8)
Answer: ALHAMBRA
Explanation: Definition: Palace
a palace in Granada, Spain
 **LA**=Los Angeles="City", reversed/"turned over"; plus **RA**=Royal Artillery, "Gunners"; with insertion/"input" of: **HAM**=actor who overacts="exaggerating Player" + **B