This is what I did to find the firefly - hope this helps!
1) Go to the location highlighted in the video north east of Grantbridgescire (there is a fast travel close by)
2) Once there make sure it is night - you can meditate to change the time
3) Find and catch firefly (press Y to catch)
4) Return back to camp and release firefly by the waterfall (in the north of the camp)