I was wondering about the spread of fire from building to building. Can a fire spread to potentially engulf a whole town? Do large cities need a fire department or bucket brigade?

I don't recall reading about any combustion mechanics either. I suppose that suggests that no such thing is in the works.

Buildings can be set on fire, but it's not as easy as just tossing a torch onto a thatch roof. They chose to break realism here as it would be too easy to destroy structures if all it took was a torch.

So, siege equipment is what will be required to set buildings on fire and destroy them quickly. Whether or not the fire will spread... maybe? I would hope so.