You are given a torch that you can then use to light your way and also light torch stands spread throughout the world. I have not yet seen any real game benefit to lighting the stands though. I would even say a majority are not really in areas I even really care to light at all. Is there any mechanical benefit to lighting them up?
There are four main benefits to using the torch.
- Lighting areas
The torch can be used to light areas in the game that are dark. In addition you can light the stands as you go through the game so you do not have to travel back to a bonfire or use a Flame Butterfly
- Changing Enemy Reactions
Certain enemies will react differently if the player has the torch lit and equipped.
- NPC Interactions
Certain NPC's dialogs will change based on use of the torch. Blacksmith McDuff is found sitting on a chest, if the player uses the torch to light the stand on the other side of the room and reloads at the bonfire, the blacksmith will have moved to the other side and the chest will be free to open.
- Environment Interaction
Certain boss fights can be made easier with the torch. Using a torch to light certain environmental objects will change both the Lost Sinner and Baneful Queen Mytha fights.
In early trailers of the game, some areas were completely dark and it was necessary to hold a torch in one hand and your weapon in the other in order to battle enemies in that area. In the end it seems that From Software backed off from that game mechanic but left the torch and sconces in, but as far as I can tell no such areas remain. The sconces would certainly have been very useful in such cases.
There is at least one NPC whose behavior changes after you light the stationary torch near them.
Torches also increase the range you can see and therefore lock on distance.
In Scholar of the First Sin lighting all the torches in Things Betwixt actually does have an effect on the game, and now requires a Fragrant Branch of Yore to accomplish.
Spoily things ahead:
A Greatsword-armed red phantom will invade you.