The Flame Tower is a defensive structure for the Latin Confederation, which can be deployed via a support power accessible from the Battle Lab anywhere on the battlefield to ambush enemies, especially infantry and light vehicles. The Flame Tower's weapon is roughly similar to the Pyro's flamethrower, only deals more damage and has longer range.
Note that the Flame Tower will not prevent the owner from being defeated should all of his/her other structures are destroyed when the "Short Game" option is enabled.
Behind the scenes
Initially the Flame Tower was supposed to be called Fiery Squad and would also have three Pyros appearing as well, but in the end it was changed to the current iteration, most likely for balancing reasons.