The most common and most likely answer to this crossword clue is the 5 letter word DRYAD
I've seen this crossword clue in The Times
D
R
Y
A
D
More clues leading to the result DRYAD
- Tree-dweller appearing in sundry advertisements
- Wood spirit no longer for drinking these days
- Tree-dweller featuring in sundry advertisements
- Nymph's parent keeping track
- Wood spirit not on alcohol promotion
- Lacking in interest nowadays, and spirit
- Wood dweller boring flyer, say
- Nymph doctor some time back
- Female in woods is crazy, showing no feelings for male
- Large tree suffering from drought, notice
Buddy explains!

The straight part
We know that "Tree-dweller" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case tree-dweller = dryad.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.
What does DRYAD mean?
DRYAD noun- In Greek myth, a female tree spirit.