Prejudice about adopting Henry's form of address (5)
I believe the answer is:
sahib
'form of address' is the definition.
(Indian form of address)
'prejudice about adopting henry's' is the wordplay.
'prejudice' becomes 'bias' ('bias' can be a synonym of 'prejudice').
'about' says the letters should be written backwards.
'adopting' indicates putting letters inside.
'henry' becomes 'h' ('H' can be a synonym of 'henry').
'bias' written backwards gives 'saib'.
'saib' going around 'h' is 'SAHIB'.
(Other definitions for sahib that I've seen before include "Respectful form of address to Indian man" , "Asian title" , "Polite Indian title" , "Indian gentleman" , "Indian title of respect" .)