Illumination is the chief purpose of the torch, but as a weapon it has the benefit of causing incineration, making it useful against, for example, Echinopsae — early in the game, torches are a quicker, safer anti-Echinops weapon than Geralt's swords. Torches are ubiquitous, available in towns, houses, crypts, ruins etc. — look in barrels or wardrobes (and worth decent coin). Surprisingly, they can not be used to light up camp fire.
Torch is an item in The Witcher 3: Wild Hunt.
It may be equipped in one of the pocket slots in the inventory panel for use as a light source. One torch is included in Geralt's starting equipment from the beginning of the quest Lilac and Gooseberries, and more can be found as loot, or bought from merchants later in the game.
In the inventory, torches are listed under the Weapons tab though they cannot be used to deal damage in combat. A torch may be equipped during combat, though it would prevent Geralt from performing strong attacks, as those require both hands to carry out.
Stepping into flammable material such as swamp gas with a torch equipped will cause that material to ignite, which would deal damage to Geralt and possibly knock him back.