I don't think there really is a canon explanation, so nobody (except maybe George) knows for sure. There's been lots of speculation however:
1) It was just fire from the homestead burning or whatnot.
2) Some kind of incendiary device like a flame rifle or thermal detonator type weapon.
3) Some kind of special "slow burn" torture setting on a standard Stormtrooper rifle.
4) Just keep shooting the bodies over and over after they're dead, and eventually they turn into skeletons.
5) The Troopers dumped some chemicals on the bodies to disintegrate or burn them and then left. Luke just happens to catch them in this state.
It all happened off screen, so we have to guess, really...
There's all sorts of questions then people ask like why the Troopers did it this way, why the bodies are as they are, etc. So feel free to use your imagination!