As for HTML5 (draft specification), the situation is not as clear as David Dorward suggests. It is true that there is no way that nested forms can be specified in the text / html serialization in the opposite way, without adding a new way to differentiate forms in the markup.
On the other hand, in serializing application / xhtml + xml, it’s not only possible to separate nested forms, but HTML5 goes over several lengths ( http://dev.w3.org/html5/spec/forms.html#form-owner ) to indicate what should happen in this case. In addition, a quick test around the latest versions of FireFox, Opera, Chrome and Safari, as well as viewing the IE9 platform, shows that they all do what HTML5 points to.
That way, it could be valid in the HTML5 content model, but it is not. What determines what is valid and what does not depend heavily on use cases. So far, no one has provided a convincing example of using WHATWG or W3C HTML WG to make nested forms part of valid HTML5.
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