The Collaborative International Dictionary of English v.0.48:

Chancel \Chan"cel\, n. [OF. chancel, F. chanceau, cancel, fr. L.
   cancelli lattices, crossbars. (The chancel was formerly
   inclosed with lattices or crossbars) See Cancel, v. t.]
   (Arch.)
   (a) That part of a church, reserved for the use of the
       clergy, where the altar, or communion table, is placed.
       Hence, in modern use;
   (b) All that part of a cruciform church which is beyond the
       line of the transept farthest from the main front.
       [1913 Webster]

   Chancel aisle (Arch.), the aisle which passes on either
      side of or around the chancel.

   Chancel arch (Arch.), the arch which spans the main
      opening, leading to the chancel.

   Chancel casement, the principal window in a chancel.
      --Tennyson.

   Chancel table, the communion table.
      [1913 Webster]

WordNet (r) 3.0 (2006):

chancel
    n 1: area around the altar of a church for the clergy and choir;
         often enclosed by a lattice or railing [syn: chancel,
         sanctuary, bema]

Moby Thesaurus II by Grady Ward, 1.0:

23 Moby Thesaurus words for "chancel":
   Easter sepulcher, ambry, apse, baptistery, blindstory, choir,
   cloisters, confessional, confessionary, crypt, diaconicon,
   diaconicum, nave, porch, presbytery, rood loft, rood stair,
   rood tower, sacrarium, sacristy, transept, triforium, vestry