How to create an list in Drupal 7
There's no single correct procedure to output HTML - as Ankit mentioned in his answer, one way is to add the raw HTML to the #markup property of an element in the form. Nothing wrong with that at all.

You could also use theme_item_list() which produces a simple HTML list with configurable attributes, and a bunch of default classes so you can target certain elements easily (see the docs for full details).

$items = array('First item', 'Second item', '...');
$form['some_element'] = array(
  '#theme' =&gt; 'item_list',
  '#items' =&gt; $items,
);


will output 

&lt;div class="item-list"&gt;
  &lt;ul&gt;
    &lt;li class="first"&gt;First item&lt;/li&gt;
    &lt;li&gt;Second item&lt;/li&gt;
    &lt;li class="last"&gt;...&lt;/li&gt;
  &lt;/ul&gt;
&lt;/div&gt;


it will probably inherit some of Drupal's core or your custom styles because of "item-list" class on the wrapper. That may or may not be what you want, so for this case I guess what you use will likely depend on that styling.