I absolutely loved celebrating birthdays in my Waldorf kindergarten class, and used a wooden birthday ring just like this one when telling the story of a child's birth.
I would place six candles in the ring, alternating with each of the six wooden figures.
As I told the child's birthday story with highlights from each year of the child's life, I would light one candle to mark each year. For example:
During Aidan's first year on earth, he learned to do many, many things. He learned to sit up, and then to crawl. He said his fist word, which was "Da-da" and he even took his first steps. That year his grandma came all the way from California to visit the family, and while she was there, Aidan celebrated his first birthday and turned one-year-old!
Here I would light the first candle, and so the story went on, lighting a candle for each year, up to the child's new age.
The six wooden figures included with the set include elements from the traditional Waldorf birthday story: an angel, the sun, the moon, a star (representing the child's heavenly life before birthday), and a house, tree and a bunny rabbit (to represent his life on earth).