How can I convert XHTML nested list to pdf with iText?

Please take a look at the example NestedListHtml

In this example, I take your code snippet list.html:

<ul>
  <li>First
    <ol>
      <li>Second</li>
      <li>Second</li>
    </ol>
  </li>
  <li>First</li>
</ul>

And I parse it into an ElementList:

// CSS
CSSResolver cssResolver =
    XMLWorkerHelper.getInstance().getDefaultCssResolver(true);

// HTML
HtmlPipelineContext htmlContext = new HtmlPipelineContext(null);
htmlContext.setTagFactory(Tags.getHtmlTagProcessorFactory());
htmlContext.autoBookmark(false);

// Pipelines
ElementList elements = new ElementList();
ElementHandlerPipeline end = new ElementHandlerPipeline(elements, null);
HtmlPipeline html = new HtmlPipeline(htmlContext, end);
CssResolverPipeline css = new CssResolverPipeline(cssResolver, html);

// XML Worker
XMLWorker worker = new XMLWorker(css, true);
XMLParser p = new XMLParser(worker);
p.parse(new FileInputStream(HTML));

Now I can add this list to the Document:

for (Element e : elements) {
    document.add(e);
}

Or I can list this list to a Paragraph:

Paragraph para = new Paragraph();
for (Element e : elements) {
    para.add(e);
}
document.add(para);

You will get the desired result as shown in nested_list.pdf

You can not add nested lists to a PdfPCell or to a ColumnText. For instance: this will not work:

PdfPTable table = new PdfPTable(2);
table.addCell("Nested lists don't work in a cell");
PdfPCell cell = new PdfPCell();
for (Element e : elements) {
    cell.addElement(e);
}
table.addCell(cell);
document.add(table);

This is due to a limitation in the ColumnText class that has been there for many years. We have evaluated the problem and the only way to fix this, would be to rewrite ColumnText entirely. This is not an item on our current technical road map.