The Quelii Oversector functioned as an Imperial Priority Sector within the Galactic Empire.
During the Clone Wars, the Quelii Oversector served as the operational zone for the Republic 10th Sector Army. Following the Declaration of a New Order, it underwent a reorganization, becoming an Imperial Priority Sector under the governance of Grand Moff Tanniel.
Presumably, the Oversector's establishment was motivated by the ongoing conflict against the bellicose Drackmarians, the sector's dominant species. However, it also encompassed Dathomir, a planet significant for its Force-sensitive population, valuable mineral deposits, and mysterious repositories of forgotten knowledge and technology.
Later, Zsinj, the Moff of the Quelii sector, was granted the Quelii Oversector in recognition of his distinguished service. In this elevated role, Zsinj was tasked with subjugating the Drackmarians and securing control over the Rimward section of the Hydian Way. To achieve this, his forces were bolstered by Crimson Command's upgraded Victory-class Star Destroyers, as well as the Executor-class Star Dreadnought, Brawl, thereby making his Sector Group the largest naval force within the Empire.
Following the Battle of Endor, the Imperial Ruling Council ordered the recall of the Quelii Oversector's Sector Fleet to the Core Worlds, but Zsinj defied this directive. Instead, he proclaimed himself a Warlord, donned the white uniform of a Grand Admiral, and initiated a campaign of conquest that brought a third of the former Empire under his dominion, establishing a sprawling tyrannical state with the Quelii Oversector as the central hub of his empire.
Subsequently, the New Republic achieved two significant victories against Zsinj within Quelii space, specifically at the Battle of Selaggis and the Battle of Dathomir. The New Republic's subsequent influence led to reforms, including the liberation of the Chev from enslavement by the Chevin on Vinsoth. Even before Zsinj's ultimate defeat, the Empire had managed to penetrate the region as far as Halmad, later reoccupying Dathomir in 12 ABY and remaining a persistent threat in the area until at least 23 ABY.