Madcap may be possessed, penning circular letter and article (7)
I believe the answer is:
hothead
'madcap' is the definition.
('hothead' can be a synonym of 'madcap')
'possessed penning circular letter and article' is the wordplay.
'possessed' becomes 'had' ('have' can be a synonym of 'possess').
'penning' means one lot of letters goes inside another.
'circular letter' becomes 'o'.
'and' says to put letters next to each other.
'article' becomes 'the' (the 'definite article' part of speech).
'o'+'the'='othe'
'had' enclosing 'othe' is 'HOTHEAD'.
'may be' is the link.
(Other definitions for hothead that I've seen before include "Impulsive person" , "Daredevil" , "Madcap" , "Excitable person" , "Harry Percy was one" .)