Knitter knitted knick-knack (7)
I believe the answer is:
trinket
'knick-knack' is the definition.
(I've seen this before)
'knitter knitted' is the wordplay.
'knitted' indicates an anagram (knit can mean to screw up or crease).
'knitter' is an anagram of 'TRINKET'.
(Other definitions for trinket that I've seen before include "Gewgaw" , "Charm" , "Ornamental item of little worth" , "Inexpensive ornament" , "Trifle" .)