You can find this item in a box next to Gunther Arcanus on an island in Brightwater Lake in Tirisfal Glades. By picking up a candle, you will start and complete the quest  . You must be on the quest  to get the candle.
Candle of Beckoning as a quest objectiveEdit
The Candle is used in a couple of side quests while investigating Gunther Arcanus. In order to prove your allegiance is not with the Scourge, you will need to take a candle from the box, go to a smaller island just southwest of the main one, and place the candle on the table. This will summon a ghostly woman named Lillith Nefara who needs to be slain.