We report the observation of the $X(3823)$ in the process $e^+e^-to pi^+pi^-X(3823) to pi^+pi^-gammachi_{c1}$ with a statistical significance of $6.2sigma$, in data samples at center-of-mass energies $sqrt{s}=$4.230, 4.260, 4.360, 4.420 and 4.600~GeV collected with the BESIII detector at the BEPCII electron positron collider. The measured mass of the $X(3823)$ is $(3821.7pm 1.3pm 0.7)$~MeV/$c^2$, where the first error is statistical and the second systematic, and the width is less than $16$~MeV at the 90% confidence level. The products of the Born cross sections for $e^+e^-to pi^+pi^-X(3823)$ and the branching ratio $mathcal{B}[X(3823)to gammachi_{c1,c2}]$ are also measured. These measurements are in good agreement with the assignment of the $X(3823)$ as the $psi(1^3D_2)$ charmonium state.