We are running a legacy CMS system that stores some content in pure HTML. This content is now fetched using http from my angular 1.5 application and displayed on the page. Should I now senatize this HTML before adding it to the page? If yes, how? If not, why not?
This depends who can enter the HTML. If only authorized personal can enter content, you could sanitize it, so it gets displayed on the page... however this may cause errors on the page, when the syntax is incorrect and I wouldn't suggest it if avoidable.
If the content can come from anyone, you definitely absolutely shouldn't insert it into your page, it opens it up for XSS attacks!
See this video, how an attack can take over your site: https://www.youtube.com/watch?v=U4e0Remq1WQ