He didn't; nobody would take the job so the Ministry appointed someone. They gave themselves the authority to do so because Cornelius Fudge is a horse's ass. Quote Fawkesfan1
6) Why did Dumbledore hire her in the first place?
Umbridge.. no complexity to her, really, so I don't know that I have a ton to say. She is who she is and you can't forget her. All of her actions, words, and scenes speak for themselves and tell you everything you need to know about her.
But what I will say is that Pomfrey's "Last year, dementors -- this year, dragons -- what are they going to bring into this school next?" in book four is one of the better quotes in the series.. dementor, dragons, and Dolores. A lovely trio of dreadful Ds.