Hello -
I burn candles all the time. It should be fine given that the candle is not in close quarters with your dragon. Also, I'd stray from any candles with overwhelming odors. Stick with the light stuff.
Out of curiousity, how old is your dragon? To eliminate immediate concern, water dragons can go several days without eating. Adults can go longer than juveniles. Your dragon may not be hungry. Are you offering food several times during a day? (e.g. Morning, afternoon, late afternoon) If your dragon refuses to eat after 6 days I'd start getting concerned. Monitor his body weight and behavior. Does he look stressed? Sick? All these things go into play. Hope this helps!