There were several different types of incendiary rounds.
The original ones in WW1 ignited on firing and burned through their flight. They left a smoke trail which was useful as a tracer, and the RAF were still using these in the BoB. However, by then the most effective type was ignited by impact. The British "De Wilde" was of this type, and the Americans copied a simplified version of it for their .30 and .50 incendiary ammo. These bullets ignited quite violently giving a flash visible to the pilot, so they were useful in revealing hits. They burned for only a fraction of a second as they passed through the plane.
In cannon calibres, incendiary material tended to be mixed with HE. Sometimes the shells were mainly incendiary, with an HE burster to scatter the material, blow holes in fuel tanks etc, sometimes the proportions were 50:50, sometimes the HEIs were mainly HE.
The essential aspect of incendiaries v HE were they they burned for a significant fraction of a second instead of going bang, so they had more chance of setting light to anything inflammable.
Tony Williams: Military gun and ammunition
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