"Fire assists an attack mightily. Water assists an attack powerfully. Water can isolate, but it cannot take away." - Sun Tzu (Art of War)
Kajutsu (火遁の術) (skills of fire) is the shinobi no jutsu of using fire. It included long range rockets, flares, prepared fire or smoke screens to aid in escape. Preferably, the shinobi could join the people running away from the fire.
Shinobi manuals often talk about fire-setting skills that destroy yagura turret towers. The shinobi had several mixtures that would set fire to these, fires that would be difficult to extinguish, helping to break through the castle defenses. These towers were buildings atop a castle wall normally consisting of a stone foundation and then a plaster and wooden wall on the top.
One shinobi trick was to set fire away from the main target to distract the defenders from the actual target and then move on with their initial aim of setting fire to more important things like the main compound. According to the Shoninki shinobi manual, when lighting a fire at night using a torch a shinobi should move it towards him gradually as to not ruin his natural night vision.
The Giyoshu military manual recommends using paper candles when there is an oil shortage. Thin sticks would be rolled in paper and coated in melted pine resin to create these candles or a twisted paper string would be boiled in wax. For signal fires, straw and grass would be placed into a hole with wolf droppings and ignited. The smoke will rise straight up and it will be quite high. Instead of grass, pine leaves and gunpowder could also be added. Alternately, the wolf droppings could simply be placed on tatami mats.