The Olympic torch relay 'tradition' was begun by the Nazis

Why am I not surprised?
Good propaganda serves any master well.

Hitler's Olympic games were the first to feature the torch relay race. They were thought up as a theatrical symbol to boost nationalistic fervor and a way to link the Aryans with the ancient Greek civilisation.

See http://hnn.us/articles/6719.html for more detail.

I should mention this info came to me via peaseblossom03.