This is most commonly used to refer to the major fire which swept through London on September 2nd 1666, and resulted more or less in its destruction, (although prior to this conflagration, the fire which destroyed a large part of the city in 1212 was known by this name).
It started in a baker's shop in "Pudding Lane". Most buildings in London at this time were constructed of highly combustible materials, wood, straw, etc, and sparks which emanated from the baker's shop fell onto an adjacent building. Fanned by a strong wind, once the fire had taken hold it swiftly spread.
ca. 13000 houses and 87 churches were destroyed, amongst them St Paul's Cathedral. The site where the fire started is these days commemorated by a large monument, and a tube station called "Monument".