Melee combat occurs when a melee unit (any military unit which doesn't have the Ranged Combat ability) attacks an enemy unit or city, or defends against an enemy melee attack. It doesn't matter if the defender has Ranged Combat; as long as the attacker doesn't have Ranged Combat the resulting battle will be melee. An important distinction of Melee combat is that both the attacker and the defender suffer damage, because the defending unit gets to 'retaliate' against the attacker.