I did not know that yesterday!

The sun holds early spiritual significance. Fire, as an element of the sun, was used to light candles in weddings, funerals, and other rituals. Fire was viewed as a symbol of beginning, or birth, as well as essential for sustaining life.

In a talk given to the Culinary Historians of Washington, DC, Shirley Cherkasky explained that candles were instrumental in measuring time, pointing to King Alfred of England's ninth-century system of measuring the day's hours with candles. Measuring or signifying the years of someone's life using candles isn't such a far jump.

A book called "The Lore of Birthdays" is cited by abcog.org regarding the first cake and candle combo. "The custom of lighted candles on the cakes started with the Greeks," who placed the cakes at the altars of the temple of Artemis. However, it's not clear if these were birthday cakes or cakes for another occasion.

Cherkasky's extensive research points to a 1799 letter by Johann Wolfgang von Goethe. According to the letter, a well-lit birthday cake was used by the Germans in or before the 18th century. Employees of a prince "carried a generous-size torte with colourful flaming candles -- amounting to some fifty candles -- that began to melt and threatened to burn down, instead of there being enough room for candles indicating upcoming years, as is the case with children's festivities of this kind."

source ask.yahoo.com