how to enable dictation on iphone 16

That is the correct procedure to turn on Dictation on your iPhone. When you are typing, are you ensuring that you are tapping the microphone icon either in the bottom of your screen or in the text field to dictate?

Learn to: Dictate text on iPhone - Apple Support

you will need to enable microphone for whatever app you are using dictation on for example in your privacy center in settings it will say different apps that have requested use of your microphone enable that then you will be good to go