Flame elves is a term used for the Druids of the Flame's appearance. They serve under Ragnaros and live in Azeroth's elemental plane of fire, the Firelands.
After the events that occurred in Mount Hyjal not long ago, a sect of druids rose up. They called themselves the Druids of the Flame. Two druids teleport near Thrall and confront him. Their leader teleports soon after and is revealed as none other than Fandral Staghelm. Staghelm was once a high ranking night elf serving under Tyrande Whisperwind. Flame elves once believed in Cenarius' teachings but have turned to worshiping Ragnaros, the firelord.
As soon as Thrall saw the flame druids he assumed they were part of the Twilight's Hammer, eventually confirmed by Fandral Staghlem that they are serving the Twilight Prophet (Later revealed as Archbishop Benedictus). These elves were more than likely twisted by their insane powers and have decided to bury everything in ashes.
The Druids of the Flame operated in the Firelands, Azeroth's elemental plane of fire.
The flame elves have every ability a standard druid has, although their powers include the use of fire. An example of this includes the Entangling Roots power which puts roots aroudn the targets legs making them unable to move. However, this attack makes the target suffer from flame damage.
Like most druids they can transform into animals. They can turn into a cat, a scorpion and a firehawk all with a pure fire appearance.