You've chosen cool warband.
If your enemy's on fire:
- can't do anthing other than moving (so cannot strike back, parry, shoot...)
- gets that S4 hit "each turn they are on fire".
- may try to roll 4+ in recovery to end the fire effect
My understanding is that "each turn", stars the moment he is lit, so yes, you hit him, then set him ablaze and he cannot strike back in addition to S4 fire hit.
As RationalLemming pointed out, you cannot take that weapon at the beginning. That's by the rules...
However it's "witch hunters only" item and other warbands can get their rare stuff from the beginning. Skaven or Sisters don't need weapon master (or training) to get their own stuff, so in my opinion you're perfectly justified to take it as starting equipment. It's not that good as it looks and probably you won't be able to afford it at the start but anyway...