Indication of decline in reduced size of certain genitalia? (7)

I believe the answer is:

scrotal

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'indication of decline in reduced size of certain genitalia?' is the definition.
I can't tell whether this defines the answer.

'indication of decline in reduced size' is the wordplay.
'indication of decline' becomes 'rot' (I can't explain this - if you can you should believe this answer much more).
'in' means one lot of letters goes inside another.
'reduced' means to remove the last letter.
'size' becomes 'scale' (scaling is a kind of sizing).
'scale' with its last letter taken away is 'scal'.
'rot' going inside 'scal' is 'SCROTAL'.

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I've seen this clue in The Guardian.

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