Rotary Encoder and Stepper motor

Steppers can be driven from an encoder, but you need an integral number
encoder steps per stepper-motor step really. You then drive the motor
like a 2-phase brushless servo. Its sometimes used in CNC setups to get
the benefits of both a servomotor and a stepper (no mis-steps, high torque
so no gearing needed). Rather specialised and such encoders aren't cheap.