In iOS 10+

Apple finally enabled the attribute playsinline in all browsers on iOS 10, so this will work seamlessly:

<video src="file.mp4" playsinline>

In iOS 8 and iOS 9

You can work around this issue by simulating the playback by skimming the video instead of actually .play()'ing it.

In short, use iphone-inline-video, it takes care of the playback and audio sync (if any), and it keeps the <video> working as it should.

    <div id="video-player">        <video src="http://movies.apple.com/media/us/html5/showcase/2011/demos/apple-html5-demo-tron-us_848x352.m4v"></video>        <p><a href="javascript:playPause();">Play/Pause</a></p>   </div>   <script type="text/javascript">        // intercept and cancel requests for the context menu        var myVideo = document.querySelector('video');        myVideo.addEventListener("contextmenu", function (e) { e.preventDefault(); e.stopPropagation(); }, false);        // hide the controls if they're visible        if (myVideo.hasAttribute("controls")) {            myVideo.removeAttribute("controls")           }        // play/pause functionality        function playPause() {            if (myVideo.paused)                myVideo.play();            else                myVideo.pause();         }         // essentially you'll have to build your own controls ui         // for position, audio, etc.    </script>

The idea is to:

1. Prevent the user getting to the context menu (to show the controls)
2. Hide any player controls that might be visible

The downside is that you have to implement your own player UI - but it's not too complicated

*This code is only intended to show you how to solve the problem, not for use in a live application

A bit more research on the subject finds:

webkit-playsinline Indicates that a video element should play in-line instead of full-screen.

Related Tags “video” Availability Available in iOS 4.0 and later. (Enabled only in a UIWebView with the allowsInlineMediaPlayback property set to YES. source

I'm afraid it just not going to be possible using the video player in Safari

They have a guide for Video on Canvas, but as you probably know it isn't supported in IOS yet: video on canvas

This document summarises the current restrictions around mobile media content in IOS: mobile video status

My understanding is that iOS always plays video full screen. On Apple's own website they used encoded image data and Javascript drawing to do video-like playback. Here is a breakdown of how they did it:

https://docs.google.com/document/pub?id=1GWTMLjqQsQS45FWwqNG9ztQTdGF48hQYpjQHR_d1WsI