Wants to be observed taking daughter back (5)
I believe the answer is:
needs
'wants' is the definition.
(needing is a kind of wanting)
'observed taking daughter back' is the wordplay.
'observed' becomes 'seen' (synonyms).
'taking' indicates putting letters inside.
'daughter' becomes 'd'.
'back' says the letters should be written backwards.
'seen' enclosing 'd' is 'sdeen'.
'sdeen' backwards is 'NEEDS'.
'to be' acts as a link.
(Other definitions for needs that I've seen before include "necessity once" , "Things that are wanted" , "Wants, requires" , "Essentials" , "Requires or lacks" .)