This is a daily from the Temple of the Jade Serpent. Your job is to put out fires using a dragon (found to the left of the door as you exit) that spits water. There are a couple of quirks in the quest.
The fires are sha-colored, silver and white, rather than red in any way. They look like evil magic swirling around the base of trees.
The dragon can only breathe water that it has collected, so you must find a pure spring of water for it to gather before you can put out a fire. The springs are easy to find, they are bright blue pools in any of the water in the Temple area. However, collecting them can be glitchy. When you get close to them, they burst upward and the dragon collects the water. In order for this to happen, the water has to hit you, the player, rather than the dragon's mouth. If the water hits the dragon's head, you won't be able to use your ability. Instead, aim for the dragon's belly and the quest will proceed more smoothly.
You can take multiple shots per pool if you quickly use the water ability and then, before it finishes casting, hit the fire button again. You get the targeting mark and can fly around a bit looking for another fire to put out as long as you don't click anything (use arrow keys to move, I mean.) If you're very fast you can get three shots out of one pool, but two is more reasonable.