The question raised here: What is the mitzvah of Hanukkah? Is it kindling the Hanukkah lights, or is it making sure other people see the Hanukkah lights? In this sugya (conversation/scene), the rabbis try and bring a few different examples to prove their side.
A dilemma was raised before the Sages: In the case of the Hanukkah light, does lighting accomplish the mitzvah, and placing the lit lamp is simply a continuation of that action, or does placing the kindled lamp accomplish the mitzvah, and lighting is just a step on the way to displaying the lights?
In this first suggested answer, Rava says that placing the lights somewhere is what fulfills the mitzvah. Rava uses the example of someone holding the lit menorah/lamp in their hands. He says it doesn't count until the person puts it down.
However, the Gemara says Rava's suggestion is incorrect, because if someone where to see a person holding the lamp, they would assume the person holding it is just using it for light, not to fulfill the mitzvah of Hanukkah.
The Gemara suggests: Come and hear a solution to this dilemma from that which Rava said: One who was holding a burning Hanukkah lamp in their hand and standing, they did nothing in terms of fulfilling the mitzvah. Conclude from this that placing accomplishes the mitzvah. Until they set the lamp down in its appropriate place, they did not fulfill the mitzvah.
The Gemara rejects this: There, they said that the person did not fulfill their obligation for a different reason. One who sees it will say that they are not holding the lamp in order to fulfill the mitzvah, but they are holding it for their own needs. Since holding the lamp can mislead onlookers, they do not fulfill the mitzvah in that manner.
The next section asks, "what if someone lit the menorah inside and then took it outside and placed it in the correct spot?"
If it's lit inside and then moved outside, an onlooker might assume that the person lighting it inside is doing it for their own benefit, not to share the lights. That leads us to believe that the action of lighting it is what's most important - as long as it's lit where it's going to be placed, and not moved later.
Come and hear another resolution for this dilemma from that which Rava said: One who lights the Hanukkah lamp inside the house and then takes it out and places it at the entrance to the house did nothing in terms of fulfilling the mitzvah.
Granted, if you say that lighting accomplishes the mitzva it is understandable, as lighting in its place is required. That is why Rava ruled that they did nothing in terms of fulfilling the mitzvah.
However, if you say that placing accomplishes the mitzva, why did Rava rule that they did nothing? Didn’t the person set it down in its appropriate place? The Gemara answers: There too, even though they subsequently brought it outside, one who sees the person lighting inside will say to themselves that the person is lighting the lamp for their own needs and not in fulfillment of the mitzva.
How can we prove that the action of lighting is what's most important? Because of this example from Shabbat. We can have a lit flame burn all through Shabbat, and then after Shabbat, we can extinguish that flame and relight it for Hanukkah.
However, if we say that the important part is placing the lights, then for this to make sense, the person would need to lift up the lantern after it's been extinguished and before it's relit.
But, even with that circular discussion, the final proof (and deciding factor) that's brought proves the answer: the blessing we say when lighting the Hanukkah lights.
A lamp that continued to burn the entire day of Shabbat, at the conclusion of Shabbat one extinguishes it and lights it again as a Hanukkah light.
Granted, if you say that lighting accomplishes the mitzvah, the requirement to extinguish the lantern and relight it in order to fulfill the mitzva of kindling the Hanukkah light works out well.
However, if you say that placing accomplishes the mitzvah, this statement, which stated that one extinguishes it and lights it, is imprecise. According to this opinion, it needed to say: One extinguishes it and lifts it from its place and sets it down and lights it, as only by placing the lamp in an appropriate place could one fulfill the mitzva of the Hanukkah light.
Furthermore, there is additional proof that lighting accomplishes the mitzvah. From the fact that we recite the following blessing over the mitzva of kindling the Hanukkah light: Who has made us holy through God's commandments and has commanded us to light the Hanukkah light,
the Gemara suggests: Conclude from this that lighting accomplishes the mitzvah, as it is over lighting that one recites the blessing. The Gemara concludes: Indeed, conclude from this.