The M”B in Siman 514 writes that it’s muter to light candles l’cavod a Bris Milah. The shailo is if the olam is really nohag like this or not?
The idea of lighting candles at a bris emerges from Sanhedrim 32b, and is noted by a number of early authorites, including the Machzor Vitri (505), Sefer Ha-Parnes (274), and others (see Taamei Ha-Minhagim 904, citing from a number of authorities).
The practice is mentioned by the Rema (Yoreh De’ah 265:5), and by later authorities (see Mishnah Berurah 559:15; Iggros Moshe, Orach Chaim 4, 61; Kitzur Shulchan Aruch 124:18).
The practice might have become less customary, on account of the prevalence of electric lighting. However, it is still correct to light candles in honor of the event, and the common custom, from my experience, is that candles are indeed lit.