Yes, it is possible that life could form on Titan, but the question is on which level.
Can life actually start on Titan?
- Is life possible on Titan at all? Yes, most likely.
- Is advanced, multicellular life possible on Titan? Potentially, but probably not.
- Is sentient life possible on Titan? Who knows. Not the way we know it, but we don't really understand what it really means to be sentient either. Is an ant colony a somewhat sentient hive-cluster? Are our pets sentient? Are humans really sentient? We're still researching it.
The current understand we have of life is that of our own, which requires some sort of "source code" (DNA, RNA) to be kept in discreet packages (viruses, cells) and that those packages can transfer their source code in order to reproduce. We initially believed that only very limited conditions would allow such system to start, but have later come to realize that it might be so that "life" can start in very extreme conditions. There are ideas of panspermia, which states that life on earth might have developed elsewhere and then been transferred here to earth through meteorites (or even aliens...). Whether this is true or not is up for debate, but we have seen that there is a lot of organic molecules forming in interstellar dust and it is, therefore, highly possible that the first nucleotides were formed in space and then "rained" down on Earth and, thus, on other celestial bodies. Another point is that we currently only know that nucleotides works as building blocks for the "source code" for life, but there might be other molecules that can do the same thing which we yet have discovered. That is, even if Titan does not allow the initial conditions for life as we know it, it might have formed outside of Titan, rained down and then managed to undergo abiogenesis, or other molecules have developed which does the same thing.
Any type of life on Titan?
There are several examples of extremophile microbial life on earth, which ranges from the interior of nuclear reactors, next to hydrothermal vents at the ocean bottom, possibly down in the Mariana Trench, in subterranean lakes half a mile under the Antarctic ice, inside rocks, etc. The conclusion from earth is that as long as life can start, then it will find a way to survive even the most bizzare conditions, and Titan might be bizzare but (probably) not too extreme. There are suggestions that Titan, if there are "warm" enough regions (>-97°C), contain liquid water thanks to the presence of ammonia. This would simplify life conditions as we know life can develop in extreme water conditions if it has started.
Multicellular life on Titan?
Potentially. Some of the extremophile life on earth are multicellular, such as the pompeii worm and the Antarctic krill. Sure, those live at far warmer conditions than what Titan allows, but they show that relatively advanced life can form in extreme conditions.
Sentient life on Titan?
I understand your question as "can something big, self-aware, and potentially human like develop on Titan", I personally believe that the answer is "no", but I might be wrong; especially since we do not really know which creatures that truly are self-aware, nor even if we humans are fully sentient. Without going into the debate about what it is to be self aware or sentient - there are research which indicates that humans are essentially just moist robots whom believe they are sentient (Wikipedia lists a bunch of interesting reading in the article "Neuroscience of free will"), then there are those philosophers whom states that believing to be sentient is the same thing as being sentient (René Descartes). Of course the research is debated and highly criticized, my point is simply that we do not have a good definition of what it really means to be sentient. As I mentioned at the start, an ant colony might be a somewhat sentient and self-aware life form even though each individual ant might not be. And, to make it even more weird, it turns out that plants might be talking to each other. Who knows, if there is a sea of krill like creatures under the ice on Titan, then they each might be acting as individual neurons in a giant brain which covers the entire moon.
Completely alternative way of life on Titan
James P. Hogan wrote the book "Code of the Lifemaker", in which life developed on Titan thanks to an automated mining ship from an alien race which crashed on Titan. The automated ship was damaged and started to produce robots which deviated from the original plans, which later led to that a form of evolution developed as some robots started to eat other robots. This evolution led, in turn, to the production of sentient robots. While this is extremely unlikely scenario, it was still an interesting book to read.