Overstated play by Edward is included (10)
I believe the answer is:
dramatised
'overstated' is the definition.
(dramatising is a kind of overstating)
'play by edward is included' is the wordplay.
'play' becomes 'drama' (synonyms).
'by' is a charade indicator (letters next to each other).
'edward' becomes 'ted'.
'included' indicates putting letters inside.
'ted' placed around 'is' is 'tised'.
'drama'+'tised'='DRAMATISED'
(Other definitions for dramatised that I've seen before include "adapted for the stage" , "exaggerated" , "Made play" .)