The siege and burning of Torquilstone castle, which forms the second of the three major climaxes of the novel, can be understood as a microcosmic representation of the themes of the novel—the battle between order against disorder, between true chivalry and corrupt chivalry based solely on power.
The castle is a symbol of everything that is wrong about the state of England. It is lawless, run by the most brutal and oppressive of the Normans, Front-de-Boeuf. All kinds of cruelties flourish within its walls, such as Front-de-Boeuf’s intended torture of Isaac the Jew, and his long-ago crime of killing his own father. The castle is also the place where Cedric, Ivanhoe and Rowena, the representatives of Saxon culture, are imprisoned, just as in the wider world Saxons are oppressed by Normans.
Torquilstone is also where the most corrupt manifestations of chivalry find a home, as in the ludicrous attempts of De Bracy to win Rowena’s affection, and the lust and ambition of De Bois-Guilbert. Not only this, the castle was the site of an ancient wrong, where a great Saxon noble and his seven sons were slaughtered by the father of Front-de-Boeuf and his men. That incident was symbolic of the conquest of Saxon culture by the Normans. It is fitting that that wrong is avenged when Ulrica sets fire to the castle. It is as if history is finally righting itself.
Given the fact that the castle and what it represents is destroyed by a band of true Englishmen, all of them Saxons (except for Richard, the chivalrous Norman), it is clear that the incident has a symbolic significance for the novel as a whole.
Scott uses a similar technique in Chapter XXXII, when he shows Locksley governing his men in the forest—managing the finances, giving out rewards, etc. This is a symbolic picture in miniature of the ideal form of government, which contrasts sharply with the existing state of affairs.