Moor that is covered in sheep ... (3,2)
I believe the answer is:
tie up
'moor' is the definition.
(I've seen this before)
'that is covered in sheep' is the wordplay.
'that is' becomes 'ie' (short for Latin 'id est', 'that is').
'covered in' means one lot of letters goes inside another.
'sheep' becomes 'tup' (tup is a kind of sheep).
'ie' going within 'tup' is 'TIE-UP'.
(Other definitions for tie up that I've seen before include "link" , "Impose restrictions on" , "Bind" , "moor" , "End" .)