Understood one in discretion (5)
I believe the answer is:
tacit
'understood' is the definition.
(I know that understood can be written as tacit)
'one in discretion' is the wordplay.
'one' becomes 'i' (Roman numeral).
'in' is an insertion indicator.
'discretion' becomes 'tact' (being tactful is being discreet).
'i' going inside 'tact' is 'TACIT'.
(Other definitions for tacit that I've seen before include "Understood without being directly expressed" , "Implicitly understood" , "Unvoiced" , "Not said though understood" , "Aircraft engine casing" .)