Iodine in decay gives dazzling display (4)
I believe the answer is:
riot
'dazzling display' is the definition.
(as in a riot of colour)
'iodine in decay' is the wordplay.
'iodine' becomes 'I' (I is the chemical symbol for iodine).
'in' is an insertion indicator.
'decay' becomes 'rot' (rotting is a kind of decaying).
'i' placed within 'rot' is 'RIOT'.
'gives' acts as a link.
(Other definitions for riot that I've seen before include "Dazzling display - revelry" , "Debauchery" , "The unruly may run this" , "loose living" , "very funny" .)