In this paper, a combined kinematic/torque output feedback control law is developed for leader-follower-based formation control using backstepping to accommodate the dynamics of the robots and the formation in contrast with kinematic-based formation controllers. A neural network (NN) is introduced to approximate the dynamics of the follower and its leader using online weight tuning. Furthermore, a novel NN observer is designed to estimate the linear and angular velocities of both the follower robot and its leader. It is shown, by using the Lyapunov theory, that the errors for the entire formation are uniformly ultimately bounded while relaxing the separation principle. In addition, the stability of the formation in the presence of obstacles, is examined using Lyapunov methods, and by treating other robots in the formation as obstacles, collisions within the formation are prevented. Numerical results are provided to verify the theoretical conjectures.