The key fact to use here is that the fourth word, "licit", must be produced from the third word using exactly one add, delete, or replace move, since that is how every word in this game is built from the one before it. So instead of worrying about the first word "illicit" for this particular check, we only need to ask, for each candidate: does removing, adding, or swapping just ONE letter turn this word into "licit"?
The remaining candidate, "Inlist", has the same problem as "Enlist": two extra letters up front plus an "s" that must become "c", which again needs more than one move, so it is also not usable.
Let's summarize:
So the third word that correctly leads into the fourth word "licit" is "Elicit".