add item to dropdown list in html using javascript

Since your script is in <head>, you need to wrap it in window.onload:

window.onload = function () {
    var select = document.getElementById("year");
    for(var i = 2011; i >= 1900; --i) {
        var option = document.createElement('option');
        option.text = option.value = i;
        select.add(option, 0);
    }
};

You can also do it in this way

<body onload="addList()">

For higher performance, I recommend this:

var select = document.getElementById("year");
var options = [];
var option = document.createElement('option');

//for (var i = 2011; i >= 1900; --i)
for (var i = 1900; i < 2012; ++i)
{
    //var data = '<option value="' + escapeHTML(i) +'">" + escapeHTML(i) + "</option>';
    option.text = option.value = i;
    options.push(option.outerHTML);
}

select.insertAdjacentHTML('beforeEnd', options.join('\n'));

This avoids a redraw after each appendChild, which speeds up the process considerably, especially for a larger number of options.

Optional for generating the string by hand:

function escapeHTML(str)
{
    var div = document.createElement('div');
    var text = document.createTextNode(str);
    div.appendChild(text);
    return div.innerHTML;
}

However, I would not use these kind of methods at all.
It seems crude. You best do this with a documentFragment:

var docfrag = document.createDocumentFragment();

for (var i = 1900; i < 2012; ++i)
{
     docfrag.appendChild(new Option(i, i));
}

var select = document.getElementById("year");
select.appendChild(docfrag);