It is is very popular and can be obtained as a reward, after completing the Pandemonium Event. After identifying the Torch and placing it in your inventory, its passive bonuses begin to work. It grants you bonuses like + to random character class, higher all resistance, a higer light radius and more. Note that the torch has to stay in the inventory to have the bonuses active. You can only have one torch in the inventory at a time.
The Hellfire Torch is a reward for completing the Pandemonium Event. To play this event, you have to find the Key of Terror, Key of Hate and the Key of Destruction 3 times first.
Then craft all 3 portals in Act 5, Harrogath with the Horadric Cube. After spawning them slay each boss in the portals, and pick up the organs. With these organs you can craft a new portal and trigger the Pandemonium Event.
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