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The Torch is a weapon obtained in Silent Hill 4: The Room. Henry Townshend picks the torch up from the lit brazier in the cemetery area during his second visit to the Forest World. The torch must be picked up for both Henry and his neighbor, Eileen Galvin to escape the Forest World.
It is used to find five missing parts of a doll. The dismembered doll is found in the charred wreckage of the Wish House Orphanage. The doll parts are found in wells. It can be relit by examining any source of fire to light or re-light the flammable head.
As the in-game description hints, the time the torch stay lit can be prolonged by dunking its head in oil. The oil is in Henry's apartment's laundry room, in a canister placed on the floor.
The torch can used as a weapon, lit or unlit, as Henry swings it like he does the steel pipe. This is not recommended; it has short reach and is weaker compared to the other weapons that would have been obtained.