"saw the fire on beacon hill for the battle of Trafalgar"
Pen y Fan, the highest peak of Bannau Brycheiniog
Creative Commons AttributionPen y Fan, the highest peak of Bannau Brycheiniog - Credit: Geowomble, Flickr

The Battle of Trafalgar was a naval engagement which took place in 1805 during the Napoleonic Wars. It culminated in a British victory although the commander-in-chief of the British fleet, Admiral Lord Nelson, was killed during the battle.

A beacon is any conspicuous device designed to draw attention, as well as any area of high ground suitable for constructing such devices. Traditionally, a chain of fires lit on hills and mountains was used as a warning device, usually to signal the advance of enemies. Such fires might also be lit in celebration, as in the example given by Lord Marchmain. 

The use of the term beacon to denote an area of high ground may be seen in the naming of the South Wales mountain range, the Brecon Beacons (Welsh: Bannau Brycheiniog). The Brecon Beacons were indeed used to locate fires which would warn the Welsh of imminent attack by the English.