Candles, torches, fireplaces and other housing light sources will only be capable of toggling effects on and off, not the actual light.
If you want to turn on the lights you can't be in decoration mode. Be close to the candles or whatever you want to light and hover you mouse cursor over it. You should get the circle with the hand in it cursor then just right click.
"We tend to avoid giving players control over light influences. Specifically, to avoid performance issues associated with lighting and also to avoid causing the light budgets for the spaces to blow out (which makes the space look worse, with light sources randomly turning on and off among other visual artifacts). Player-controlled light sources can also be a source of grief-play for the same above reasons".
The Lord of the Rings
Online Team Turbine, Inc.