Female associate embraces current misconception (7)
I believe the answer is:
fallacy
'misconception' is the definition.
(fallacy is a kind of misconception)
'female associate embraces current' is the wordplay.
'female' becomes 'f' (abbreviation).
'associate' becomes 'ally' (ally is a kind of associate).
'embraces' means one lot of letters goes inside another.
'current' becomes 'ac' (alternating current).
'ally' going around 'ac' is 'allacy'.
'f'+'allacy'='FALLACY'
(Other definitions for fallacy that I've seen before include "Incorrect notion based on false reasoning" , "Faulty argument" , "Wrong but prevalent notion" , "Faulty reasoning or mistaken belief" , "False or mistaken belief." .)