Points out part of engine
I believe the answer is:
piston
'part of engine' is the definition.
(I've seen this before)
'points out' is the wordplay.
'out' is an anagram indicator (out can mean wrong or inaccurate).
'points' is an anagram of 'PISTON'.
(Other definitions for piston that I've seen before include "Trumpet part" , "A moving part of car engine" , "Valve that's instrumental" , "Transmitter of motion from camshaft to valve" , "Points about driving rod" .)