Indicated it is not in action (7)
I believe the answer is:
denoted
'indicated' is the definition.
(I've seen this in another clue)
'not in action' is the wordplay.
'in' means one lot of letters goes inside another.
'action' becomes 'deed' (deed is a kind of action).
'not' placed within 'deed' is 'DENOTED'.
'it is' is the link.
(Other definitions for denoted that I've seen before include "Indicated or meant" , "Signified" .)