Prepare to admit first blunder (7)
I believe the answer is:
mistake
'blunder' is the definition.
(both can mean an error)
'prepare to admit first' is the wordplay.
'prepare' becomes 'make' (synonyms).
'to admit' means one lot of letters goes inside another.
'first' becomes 'ist' (ist resembles mst).
'make' enclosing 'ist' is 'MISTAKE'.
(Other definitions for mistake that I've seen before include "16 down" , "Error" , "Fault" , "Wrong action or judgment" , "Slip" .)