Power-crazed individual confused by a magical omen (12)
I believe the answer is:
megalomaniac
'power-crazed individual' is the definition.
(someone obsessed with power)
'confused by a magical omen' is the wordplay.
'confused' indicates anagramming the letters.
'by' means one lot of letters go next to another.
'a'+'magical'='amagical'
'amagical' put after 'omen' is 'omenamagical'.
'omenamagical' is an anagram of 'MEGALOMANIAC'.
(Other definitions for megalomaniac that I've seen before include "Act of controlling by force" , "Power-mad individual" , "One thinking he is great" , "Pathological egotist" , "Person with delusions of power" .)