The most common and most likely answer to this crossword clue is the 5 letter word FLAKY
I've seen this crossword clue in The Guardian
F
L
A
K
Y
Buddy explains!

The straight part
We know that "peeling" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case peeling = flaky.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 FLAKY mean?
FLAKY adjective- Consisting of flakes or of small, loose masses; lying, or cleaving off, in flakes or layers; flakelike.
- (of a person) Unreliable; likely to make plans with others but then abandon those plans.
- (of a thing) Unreliable; working only on an intermittent basis; likely to malfunction.