Chick knotted towel (5)
I believe the answer is:
owlet
'chick' is the definition.
(a young owl)
'knotted towel' is the wordplay.
'knotted' indicates an anagram.
'towel' anagrammed gives 'OWLET'.
(Other definitions for owlet that I've seen before include "One may give a little screech" , "Young nocturnal bird of prey" , "Young fly-by-night" , "Nestling" , "Young nocturnal hunting bird" .)