The Red Zone is a 5 square chunk large area in the south (according to Minecraft compass direction, as the sun sets in the north.) that is currently engulfed in fire. The fire, which is burning trees, was started by a fairly large lava pool in the center of the area. The fire has burned down the entire world several times, causing tre server to be reverted to the most recently available backup.It is extremely advised to stay away from The Red Zone, as getting to close could activate the chunks that are on fire, and cause the world to burn.
Through investigation via a single-player copy of the world, it seems improbable that the lava pool pictured here caused the fire. If you see the aerial screenshot of the Red Zone, you will notice what seems to be 2 different fires. The thing is, they are 2 different fires. the smaller fire is where the lava pool is (The trees conceal it), however the larger fire has no spparent source of ignition.
The larger fire lies on top of a large cliff, with an incredibly steep face. Such a steep face would make it impossible for trees to grow there, and fuel the fire from the lava pool. Around the area, however, are large sloping holes, where trees may have stood to trigger the larger fire. The mechanics behind the fire are perplexing, and we may never know what caused it.