The most common and most likely answer to this crossword clue is the 7 letter word CAMELOT
C
A
M
E
L
O
T
More clues leading to the result CAMELOT
- Turned up by chance in court
- Left in piece of jewellery on time for royal court
- Rivers surround highest part of Edinburgh: Arthur's seat
- Locate winds around opening to meadow, idyllic place
- Legendary castle attended by fate
- On location for filming, ‘attended’ fictional court
- Ideal location where queen, perhaps, keeps endless fruit
- Old books on desert traveller in ideal location
- ’70s prog rock band books castle
- A setter takes fool round a castle …
Buddy explains!

The straight part
We know that "Arthurian setting" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case arthurian setting = camelot.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.