Challenged to go round the Pole, that's clear (7)
I believe the answer is:
'clear' is the definition.
'challenged to go round the pole' is the wordplay.
'challenged' becomes 'defied' (defying is a kind of challenging).
'to go round' is an insertion indicator.
'the pole' becomes 'N' (abbreviation for North, as in North Pole).
'defied' going around 'n' is 'DEFINED'.
'that's' acts as a link.
(Other definitions for defined that I've seen before include "Gave the exact meaning of, say a word" , "Gave exact meaning or explained scope" .)