In Potsdam, I design pots! (4)
I believe the answer is:
amid
'in' is the definition.
'potsdam i design pots' is the wordplay.
'pots' says the answer is hidden in the clue (the answer is contained or potted by the clue).
'AMID' is hidden in the letters of 'potsdam i design'.
(Other definitions for amid that I've seen before include "A dim sort of preposition" , "In the thick of" , "In the middle of" , "In the centre of" , "Maid (anag)" .)