It's folly and worked out in chaos (7)
I believe the answer is:
madness
'it's folly' is the definition.
(I've seen this in another clue)
'and worked out in chaos' is the wordplay.
'worked out' indicates anagramming the letters.
'in' is an insertion indicator.
'chaos' becomes 'mess' (I've seen this in another clue).
'and' is an anagram of 'adn'.
'adn' put inside 'mess' is 'MADNESS'.
(Other definitions for madness that I've seen before include "Lunacy - ska/pop band" , "Dementia" , "Irrationality" , "hysteria?" , "Group" .)