"Commands respect" = the correct expression. But "demands respect" you will hear often, however it carries a sense of someone EXPECTING respect, sometimes out of fear and frightening the other person. You will hear of old time gangsters wrongly using the word respect when they should be saying "fear". "I am the top man around here people respect me" = they say hello Mr x ? because if they don't they won't be alive tomorrow (because the gangster is a total madman).

we do say it. But when you say that someone demands respect it means that they expect you to respect them and that if you don't something bad might happen. like a dictator.

They are equivalent in this context, as he clearly has a commanding personality. If we should respect him for other reasons, for example his intelligence, demands is better.