Велеть is used when describing historical events:
Царь велел... (although I'd used повелел)
По высочайшему велению.

also when saying something like:
Начальник велел сделать мне это (in a conversation: the boss told me to do that). (the difference is like between to order to do smth and to tell to do smth)

also when speaking to children:
Делай, как велела мама (Do as Mom told you).