Illumination

[Llama]

A new object (held in hand)

Lantern
Made by: Carpenter
Uses: Cloth, Honey (wax actually, but we don't have wax IG), wood

Torch
Made by: Tailor (yaaay)
Uses: Cloth, Branch

Simple version

A person who holds a torch or a lantern in his/her hand, will be able to see clearly when it is dark, foggy or otherwise. The quality of the thing determines how much light it gives, a rubbish one would allow you to see through night only, while an excellent one, even through fog. The person sees as clearly as he sees indoors

Complex Version

A person who holds a torch or lantern in his/her hand, will have a circle of light around him or her. In that light, they can see as if they were inside, and others can see also. The quality of the object determines the radius of the circle. The radius is also determined by the perception of the person watching it.
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The quality of the item never degrades. I know its unrealistic, but I don't want to add an extra burden...

[Jupiter]

It is allready planed, like I know.
But there a few things, why it can't work yet. ( I think it has something to do with the client, or so. )

[AlexRose]

Yeah, it's planned; in the map dev client there's all sorts of lights e.g. glowing mushrooms and torches which are not yet usable but planned for when darkness becomes really dark and light is needed .

You can see an example of lights when someone casts a spell or you get a swirly anyways