A lit torch is an item used during the Evil Spirit task in Zodiac Festival.
It's obtained by selecting the Light Torch option on the brazier by Varrock's eastern gate. It must then be carried to the brazier south of Canifis lodestone while keeping the torch lit. Lighting the brazier at the destination completes the task by warding off the terrifying ghost nearby.
The torch extinguishes and disappears from the player's backpack if the player teleports, or after approximately 2 minutes and 30 seconds after obtaining it from the brazier.