See cod? I see flounders (7)
I believe the answer is:
diocese
'see' is the definition.
(both can mean a bishop's associated area)
'cod? i see flounders' is the wordplay.
'flounders' indicates an anagram (I've seen 'flounder' mean this).
'cod'+'i'+'see'='codisee'
'codisee' is an anagram of 'DIOCESE'.
(Other definitions for diocese that I've seen before include "Bishop's responsibility" , "Church district" , "Bishopric" , "District under care of bishop" , "District under a bishop's authority" .)