As Deku Link, perform Down A while having the B button dimmed will give Deku Link Restricted Items. Draw the great fairy and slash anywhere, then pull out a stick and get near a torch to flame the stick, and the flame will appear where last you slashed the sword.
You can also spin attack to bring the flame with you but it will stay in midair again when Deku stops spinning.
This can also be performed as Zora, but Zora is more limited because the only way to do this where a torch can be is south clock town with text storage RI. After you get Restricted Items, simply slash your fins anywhere, get near a torch to lit up the stick and the flame with appear where you last slashed.