Setter's embraced by pop diva, having adult fantasy! (7)
I believe the answer is:
chimera
'fantasy' is the definition.
(I've seen this before)
'setter's embraced by pop diva having adult' is the wordplay.
'setter' becomes 'me' (the setter of the clue).
'embraced by' means one lot of letters goes inside another.
'pop diva' becomes 'chir' (I can't explain this - if you can you should believe this answer much more).
'having' is a charade indicator (letters next to each other).
'adult' becomes 'a' (abbreviation).
'me' put within 'chir' is 'chimer'.
'chimer'+'a'='CHIMERA'
Can you help me to learn more?
(Other definitions for chimera that I've seen before include "Race him (anag.)" , "Illusory aim; monster" , "fabulous beast" , "Mythical creature; delusion" , "Each rim (anag) - foolish fancy" .)