From Team Fortress Wiki
The Commander would overlook the map, providing air support, placing buildings and communicating tactics. Scrapped during the middle of Team Fortress 2's long development cycle, the Commander concept has been reworked into the coaching system.
During the development of Team Fortress 2, originally titled Valve's Team Fortress then titled Team Fortress 2: Brotherhood of Arms, the team pushed for a more realistic approach when designing the game. Valve worked to create a modern war game with the then state-of-the-art technologies and techniques, which included parametric animation; seamlessly blended animations for smoother, more life-like movement; and Intelligence's multi-resolution mesh technology dynamically reducing the detail of on-screen elements as they become more distant to improve performance (a technique made obsolete by decreasing memory costs, since today's games use a technique known as level of detail, which uses more memory but less processing power).
Included in this modern direction was the design of a military command hierarchy, introducing a Commander role; the player would have a bird's-eye view of the battlefield, reminiscent of Real-Time Strategy games, allowing for new influence in battle. With numerous innovations such as networked voice communication, the Commander would have been able to help coordinate attacks, alert to enemies, placing structures, call for parachute drops over enemy territory, to name a few; however, unlike the remainder of the classes, due to the RTS design, the Commander was a non-physical role, only able to passively influence battle.
Complications and Removal
In a Gravel Pit developer commentary with Robin Walker, he discusses the reason why the development time for Team Fortress 2 took a significant amount of time. Among the reasons were the balancing issues with the Commander role in gameplay.
The Commander, along with such features as a more realistic approach, were scrapped during Team Fortress 2's development and steps towards to the cartoonish final design then began.