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I'm in the Alik'r desert and I'm going to all the alchemists to get some ingredients for a potion of restore power and I asked someone where the alchemists were in this region and they said there was one in Vellen's Hold, I checked the map and Vellen's Hold didn't come up, I am 100% sure I spelt it correctly, and so I checked all the towns and none of them said Vellen's Hold. Does Vellen's Hold actually exist or is this just something they forgot to add to the game? I am really confused.

I thought maybe you meant Kellen Hall instead of Vellen's Hold, but Kellen hall is a hamlet without any shops at all. So I asked around got the exact same thing, the NPC suggest Vellen's Hold. I used a cheat to reveal all map locations and there it is: Vellen's Hold is a dungeon! Certainly no alchemists there! What as odd bug.

I think we should edit it out of the article on Alik'r - https://en.uesp.net/wiki/Daggerfall:Alik%27r, it was clearly put here by mistake then.

Since Vellen's Hold is listed as a Barbarian Stronghold, could there be a Barbarian Alchemist there? Do any of the various types of strongholds ever contain merchants or friendly NPCs? Sorry, I've never played Daggerfall, so I have no idea.

https://en.uesp.net/wiki/Daggerfall:Alik%27r/Dungeons

No, there are never any services in dungeons, and no friendly NPCs unless a quest put them there.