Overlook counterfeit clothing I see (7)
I believe the answer is:
forgive
'overlook' is the definition.
(thesaurus)
'counterfeit clothing i see' is the wordplay.
'counterfeit' becomes 'forge' (synonyms).
'clothing' is an insertion indicator (some letters cover up or clothe others).
'see' becomes 'v' (short for 'vide', Latin meaning 'see elsewhere').
'i'+'v'='iv'
'forge' enclosing 'iv' is 'FORGIVE'.
(Other definitions for forgive that I've seen before include "Condone" , "Absolve" , "Pardon" , "free of blame" , "Excuse (an offence)" .)