Used in racing between teammates to create a more favorable outcome to a race. Most often done to aid a driver who has a chance at winning a championship.
Can be done covertly by possibly "adjusting" a pitstop time by having "problems" with tires or fuel rig, or having a driver slow slightly over the course of several laps. Can also be done blatantly in front of the crowd by having a driver move aside at the finish line on the final lap, most likely angering the crowd, such as was done at the 2002 Austrian Grand Prix. Ferrari F1 driver Rubens Barrichello was ordered to pull aside within sight of the checkered flag to allow teammate Michael Schumacher to win the race, angering fans. This was in no way necessary, as Schumacher was able to easily win the title in France.
After this particular incident, the FIA has said that there is no way that team orders could be completely outlawed, as the former method of ordering teammates to switch positions could still be used. It did say however that in the future it may make a rule to fine a driver and/or team for such farcical moves that hurt the reputation of the sport.