Forest dweller still in its youth's a horny spirit, we hear (4)
I believe the answer is:
fawn
'forest dweller still in its youth's' is the definition.
(a young deer)
'a horny spirit we hear' is the wordplay.
'a horny spirit' becomes 'faun' (horned woodland spirit in Greek mythology).
'we hear' shows a homophone (sound like).
'faun' is a homophone of 'FAWN'.
(Other definitions for fawn that I've seen before include "Be obsequious towards young deer?" , "Be servile" , "Young fallow deer" , "Light brown colour" , "Yellowish brown; grovel" .)