There is a cat in Cruible that needs some items. I got the pants and the ring. The third item is proving to be much more difficult. There is a certain torch that I can't seem to pick up. I need to pick up this torch inorder to unfreeze a container. How do I complete this quest?

if remembering correctly you need to physically pick up and drag the torches over the brazier thingies in a correct order they burn for specific times some shorter then others you have to get them on all at the same time.

Every time I go to pick up the torch I get a message that says the following: All may carry the torch, but none can own it. The best I have been able to do so far is kick the torch around the room.

Yes you have to pick it up by holding the use button you know how your able to hold any small item like forks and food stuff and actually throw it or place it where you want you have to do that with the torch you can carry it but you cant put it in your inventory.