To enclose something is to surround it or cover it up. An envelope encloses a letter.
To enclose is to put something inside something else. A crowd of people could enclose a celebrity, or a wall might enclose a garden. In Edgar Allan Poe’s story “Masque of the Red Death,” the Prince encloses his party guests inside the castle walls (along with the Red Death). (Oops!) A box might enclose a present. If you enclose something with a letter, you’re putting it in the envelope, too.