Villa's proud seven-match unbeaten away league run came to a halt at Eastlands as they suffered their first defeat on the road since early November.
A first half penalty from Elano and an 89th minute clincher from Shaun Wright-Phillips left Martin O'Neill's men empty-handed on a night when little went right for them.
After a disappointing opening 45 minutes, Villa looked far more dangerous in the second half following a reshuffle.
Despite creating a number of chances, however, they were caught out when Wright-Phillips exchanged passes with Stephen Ireland before firing into the bottom corner.
Even so, Villa remain fourth in the Barclays Premier League table - three points ahead of Arsenal.
89mins - GOAL - Shaun Wright-Phillips
makes no mistake - slotting past Brad Friedel from close-range.88mins - SUBSTITUTION - Craig Gardner for Carlos Cuellar
86mins - Gabby Agbonlahor produces an excellent centre but Richard Dunne does brilliantly to clear the danger.
85mins - Fantastic run down the left by Ashley Young but his centre is too hard to trouble the home defence.
83mins - SUBSTITUTION - Valeri Bojinov for Elano
83mins - Ched Evans fires high and handsome from close-range.
78mins - Gareth Barry shows his class with a tremendous spread play to Ashley Young on the left. The wing wizard sees his cracking strike deflected out for a Villa corner. From the subsequent centre, Stiliyan Petrov has a drive blocked. It's absolutely relentless stuff.
75mins - Words can't express how good a save Brad Friedel has just made. The USA keeper gets down to his left to turn a cracking Elano left-foot volley around the post.
74mins - SUBSTITUTION - Ched Evans for Felipe Caicedo
72mins - FC - Colin Kasprowicz: "The tension is unbearable. Come on Villa - let's get a goal to keep the Champions League challenge going." Thanks Colin - they are giving it a real go in this second half - impressive stuff.
71mins - Fantastic play from Villa. Gabby Agbonlahor's centre is volleyed by Gareth Barry but Shay Given does fantastically well to save at his near post.
69mins - No sooner have we said that than Manchester City have a good chance to double their advantage. Felipe Caicedo reaches Wayne Bridge's great cross from the left but the powerful forward prods the effort wide.
68mins - Gareth Barry's fierce long-range drive is deflected away from harm by Richard Dunne. This is much better stuff from Martin O'Neill's men. They look a different team in this second half.
66mins - Gelson Fernandes makes an immaculate interception as Luke Young's throughball looks like it could make it through to his namesake Ashley.
59mins - That's more like it as Ashley Young's goalbound shot is deflected just wide. Villa are in total control in this second half but can they get a goal?
57mins - BOOKING - Gareth Barry (dissent)
55mins - MON gives the Villa fans a wave.
52mins - Emile Heskey heads down a Gareth Barry corner but there's no-one there to follow up. Villa are coming more into the game. One goal now and it's a different complexion all together.
50mins - FC - Greg Asad: "JC has been superb off the bench this season. Hopefully his energy will have an impact." We hope so Greg. Nice to hear from you all the way from Ohio in the USA.
47mins - SUBSTITUTION - Gelson Fernandes for Nigel De Jong
47mins - Big John is on! James Milner is now right-back, Carlos Cuellar is in the centre of defence while Emile Heskey is in right midfield. JC is up front with Gabby Agbonlahor.
46mins - SUBSTITUTION - John Carew for Curtis Davies
46mins - FC - Niall Butler: "We need a big second half." We certainly do Niall.
46mins - FC - Vince Berry: "I'd be happy to come away with a draw - Manchester City have a fantastic home record." Good point Vince.
HT - Much better second half needed - we're not out of this yet with just one goal in it.
45mins - Stephen Ireland is so close to making it 2-0 but he can't reach Shaun Wright-Phillips's expert cross.
43mins - MON has his hands on his hips - he doesn't look happy.
41mins - Ashley Young is limping after a challenge by Richard Dunne - and he didn't even win a free-kick.
35mins - Another great chance for City. Shaun Wright-Phillips - on fire this evening - releases Felipe Caicedo. Thankfully, the strong striker's shot deflects into the arms of Brad Friedel.
33mins - FC - Nicholas Jones: "Come on Villa. We've come so far this season - we don't want to miss out now." Don't lose heart Nicholas.
32mins - Better spell of possession for Villa but James Milner's eventual cross from the right is straight into the arms of Shay Given.
31mins - BOOKING - Felipe Caicedo (handball)
27mins - The goal had been coming - now it's up to the claret and blue troops to show their taste for the battle.







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