The most common and most likely answer to this crossword clue is the 7 letter word MONITOR
I've seen this crossword clue in The Daily Telegraph
M
O
N
I
T
O
R
More clues leading to the result MONITOR
- Second buffoon given gold watch
- Supervisor to check lizard
- Keep an eye on lizard
- Lizard lays egg in heath
- Keep an eye on fool entering desolate area
- Check up on men having second egg to begin with
- Large lizard egg found in upland area
- Keep watch on idiot in Othello, for one
- Keep an eye on idiot visiting heathland
- Supervise fool in dock
Buddy explains!

The straight part
We know that "Observe and report on/lizard" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case observe and report on/lizard = monitor.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does MONITOR mean?
MONITOR noun- Someone who watches over something; a person in charge of something or someone.
- A device that detects and informs on the presence, quantity, etc., of something.
- A device similar to a television set used as to give a graphical display of the output from a computer.
- A studio monitor or loudspeaker.
- A program for viewing and editing.
- A student leader in a class.
- One of a class of relatively small armored warships designed for shore bombardment or riverine warfare rather than combat with other ships.
- An ironclad.
- A monitor lizard.
- One who admonishes; one who warns of faults, informs of duty, or gives advice and instruction by way of reproof or caution.
- A tool holder, as for a lathe, shaped like a low turret, and capable of being revolved on a vertical pivot so as to bring the several tools successively into position.
- A monitor nozzle.
- To watch over; to guard.