The Campfire is a crafting station used to cook fish and raw meat. If you don't cook specific food (eg. fish and meat), they will damage you when eaten, so be sure to build and use a Campfire. It also provides a little bit of light, similiar to the Pole Torch.
Campfire + Bluefish = Cooked Bluefish
Campfire + Raw Alpaca Meat = Cooked Alpaca Meat
Campfire + Raw Giraffe Meat = Cooked Giraffe Meat