One challenges you to give in, taking on Observer, say (6)
I believe the answer is:
defier
'on observer say' is the definition.
The definition suggests a singular noun which matches the answer.
'one challenges you to give in' is the wordplay.
I cannot quite understand how this works, but
'one' could be 'i' (Roman numeral) and 'i' is found in the answer.
'give in' could be 'defer' (synonyms) and 'defer' is found in the remaining letters.
No letters remain.
This may be the basis of the clue (or it may be nonsense).
'taking' is the link.
Can you help me to learn more?
(Another definition for defier that I've seen is " who will not yield".)