The signal fire was a symbol of civilization, and the boys' attempts and willingness to return to society and real life. You can use this as a gague throughout the book to tell how close or how far away the boys are from society, and when they've given up all hope of being rescued..
At the beginning of the book, the boys set up a fire at the highest point on the island. This fire is to be a signal to flag down any ships that might be passing by and then could rescue the lost children. This fire burns strongly for a while, but as the boys pass to being more and more savage, they let the fire burn down and eventually burn itself out, leaving little to no chance to be found by adults and be brought back to society and civilization.
The fire is started using Piggy's glasses, and Piggy is the other symbol for civility.
The fire burns bright at the start of the novel, and all the boys help keep it going in hopes of being rescued and brought back to their normal lives.
The book moves on, and the boys fall deeper into their savagery, and the signal fire is left to die out. For a while, the fire is given up, and even though the four boys try and keep it going, they know they cannot do it. The fire is given up on, and survival is their main focus.
The end of the book arrives, and there hasn't been good signal fire in a while. Ralphy is the only member of his own tribe left, and he's being hunted by the others. All hope seems lost, and civilization seems gone forever. Jack, the leader of the savages starts a...