Which sentence best uses grammar for clarity and style?

1. A flashback is a device in which a story is interrupted to present a past event.
2. A flashback is a device where a past event interrupts the story.

I believe its the second one because of its clear independent clause. Am I correct? Thanks.

Is "a device" a place? The word "where" is normally used to refer to a place.

Yes, I believe the word "device" is referring to a place.

From Google:

"de·vice
dəˈvīs/
noun
1.
a thing made or adapted for a particular purpose, especially a piece of mechanical or electronic equipment.
"a measuring device"
synonyms: implement, gadget, utensil, tool, appliance, apparatus, instrument, machine, mechanism, contrivance, contraption; More
2.
a plan, scheme, or trick with a particular aim.
"writing a public letter is a traditional device for signaling dissent"
synonyms: ploy, tactic, move, stratagem, scheme, plot, plan, trick, ruse, maneuver, machination, contrivance, expedient, dodge, wile
"an ingenious legal device"

"where" is not correctly describing the word device?

No. Where does not describe a device.

The first sentence is more grammatically correct because "which" is describing the word device. Thank for your time and help.

You're right -- and you're welcome.