it = double illumination of fire and candle
The general rule is that
a pronoun refers to the closest previous noun phrase it ‘agrees with’ in number and gender and semantic sense.
But if taken too literally this can be confusing. In the present instance there are two possible sources of confusion:
The closest previous noun phrase is in fact candle: this is a singular inanimate object and it’s not difficult to imagine that a candle could contrast with darkness.
However, candle is just one piece of the prepositional phrase of fire and candle, which is a component of the larger noun phrase double illumination of fire and candle. It is thus has a subordinate role in the sentence—it is ‘background’ to the head of the phrase, illumination; and as we track back mentally to find the pronoun’s referent we travel from head to head, and only dig down to subordinate entities if no head satisfies our search.
illumination is described as double, which might seem to call for a plural pronoun. However, it the noun itself is singular in form; and in fact it is singular semantically as well, for the ‘doubleness’ is a quality not of the illumination itself but of its cause. It is a single brightness, intensified (rather than multiplied) by being created by two sources.
So the rule is in fact observed; it just requires some subtlety in application.