You could dip the 'flame' in rubbing alcohol diluted to 50% with water and actually ignite it without destroying the napkin. Try it with your mother's best table linens!
Fold the napkin in half diagonally.
Fold the point of the triangle down to meet the long edge in the center. Fold the same direction again, so the edge you just created covers the point.
Fold up one end at an angle, so the corner of the napkin protrudes an inch or so above the top edge. This corner is the flame.
Starting at the flame end, roll up the napkin to form the body of the candle.
When nearly at the end of the roll, fold the remaining edge down along the body the same way as you did the flame (but in the opposite direction). Tuck the corner into the bottom of the candle neatly so that it will stand up.