However, Abdoulaye Doucoure pulled a goal back with five minutes remaining to set up a nervy finale, which City rode out to pick up the win.
Find out how all of the action unfolded courtesy of Sports Mole's minute-by-minute updates below.
City could move five points clear until at least tomorrow night if they chalk up yet another victory tonight, while Watford have suffered a dip in form at just the wrong time ahead of this daunting prospect. The Hornets have impressed at times this season, though, and on their day are more than capable of causing problems for this City side.
We will have a closer look at both in a little while, but first let's check out the team news...
Well, we'll start with the visitors - one of the many perks of being champions - and Pep Guardiola is certainly sticking to his promise of making changes during the busy December.
The headline is that Sergio Aguero misses out once again having also been sidelined for the weekend win over Bournemouth with a muscle problem, meaning that Gabriel Jesus leads the line for the third game in a row.
Indeed, it is all change in the back for as Pep Guardiola switches his defence completely - including an increasingly rare start for club captain Vincent Kompany. Kyle Walker and John Stones also return to the side as Danilo, Otamendi and Laporte drop out.
Bernardo is therefore the only one of the goalscorers against Bournemouth to retain his place, although it speaks volumes for the strength in depth of the squad that they make so many changes but are still able to name such a fearsome team.
As expected, Nathaniel Chalobah comes into the side in his place, sitting alongside Abdoulaye Doucoure in the midfield.
Deeney will want more goals this season having struggled to find the back of the net so far this term, but his primary role tonight is likely to be holding the ball up and roughing up those City defenders.
Pereyra starts again this evening and will be looking to cause problems on the counter-attack should the game go as expected, although much of his time may be spent behind the ball and helping to defend considering City's threat down the flanks.
Mariappa drops to the bench for this match, although Kabasele may not have the fondest memories of Man City having scored an own goal in their most recent meeting in January.
This certainly is not the best fixture for a team that has been struggling for form of late, and Watford will need to muster up some of their early-season momentum if they are to stand any chance tonight having picked up just one point from their last four Premier League outings now.
The recent 3-0 home defeat at the hands of Liverpool was harsher than the scoreline suggests, but then they fell to a 2-0 defeat at the hands of Leicester at the weekend, conceding both goals inside the opening 23 minutes and ending the game with 10 men - although they did have chances to claw themselves back into that match.
Of course, Watford were never expected to maintain that pace, but Javi Gracia may not have been expected such a sharp downturn in form. Since winning those opening four games, Watford have won just one of the next 10 in the league, drawing two and losing six.
Goalscoring has also been an issue, with just eight goals coming from those 10 games.
Nevertheless, defeat tonight would see the Hornets lose three games in a row for the first time under Gracia, so the pressure is on to turn this slide around sooner rather than later.
Defeat tonight would leave them with their lowest points tally after 15 matches from their four seasons since they returned to the top flight, but victory could lift them as high as sixth in the table.
Indeed, heading into this match they have lost three of their last four home league games, which is as many defeats as they had suffered in their previous 15 at Vicarage Road.
However, they have beaten the reigning champions at home in each of their last two Premier League campaigns, beating Leicester 2-1 in 2016-17 and Chelsea 4-1 last season.
Even ignoring Watford's dip in form for a moment, City come into this match having won each of their last six Premier League games and still unbeaten in 14 so far this term to quickly reassume their position at the top of the pile.
Incidentally, the only two games City have failed to win this season have been the only two games in which they have failed to score in the first half, so first on the Watford agenda tonight will be getting to half time at 0-0 or better. A tough ask admittedly, but surely something they will be aiming for.
Not only is that comfortably the best attacking record and the second-best defensive record in the league, but it is also the best goal difference after 14 games of an English top-flight season since the very first league campaign in 1888-89, 130 years ago.
Preston were the team to record that al-time best goal difference, and they went on to become the inaugural 'Invincibles' - a very exclusive club Man City will be looking to join this year.
City nonetheless sit two points clear of the Reds, though, and victory tonight would extend that lead to five with Liverpool - and the rest of the top eight, for that matter - not in action until tomorrow night.
Guardiola's side were far from their best against Bournemouth, but they still managed to control the game for the most part and, after surviving a scare when Callum Wilson equalised, went on to win relatively comfortably through goals from Bernardo, Sterling and Gundogan.
Guardiola's side are unbeaten in their last 13 away Premier League games, winning 10 of those and drawing three in a run which stretching back to January. The champions have conceded just five goals in those 13 games too, and never more than once in a match.
Another slice of history could beckon too, with City aiming to equal their longest-ever unbeaten streak away from home in the top flight, which was set in April to December of last year.
The hosts have hit a poor spell of form at just the wrong time to visit Man City to town, although the visitors have been so impressive that it would be hard to back against them even if Watford were in fine form. We're going for another Man City win.
SPORTS MOLE SAYS: Watford 0-3 Man City
Indeed, across all competitions City have won all eight of their matches against Watford this decade, scoring at least twice on each occasion to rack up an aggregate score of 27-4.
The most recent of those came at the very start of this calendar year, when Sterling opened the scoring in the very first minute before Man City went on to build a 3-0 lead. Gray pulled one back late on for Watford, but it was a routine win for City in the end at the Etihad.
Indeed, Man City tonight could become only the second team to score five or more goals in three consecutive top-flight away games against an opponent. West Brom - against Birmingham from 1957 to 1960 - are the only team to have previously managed that feat.
WATFORD STARTING XI: Foster; Femenia, Cathcart, Kabasele, Holebas; Hughes, Doucoure, Chalobah, Pereyra; Deeney, Success
MAN CITY STARTING XI: Ederson; Walker, Kompany, Stones, Delph; Bernardo, Silva, Fernandinho; Sane, Mahrez, Jesus
The winger only has Foster to beat and just goes for the dinked finish, but Foster sticks up a big hand to make a magnificent save. Big, big chance for the visitors!
The ball then bounces out to Bernardo, but he is also denied by Foster, and then the Watford keeper makes it a trio to wonderful stops to deny David Silva from another rebound. Still the danger is not over, though, and Watford's defence are finally able to hack it away after Mahrez failed to make anything of it inside the area.
Doucoure hooks the ball over his head and back into the box and Deeney turns it towards goal, but Ederson makes a crucial stop with his feet.
Mahrez initially swings a lovely ball in to the back post, where Silva meets it but sees his effort come off the keeper then back off his shins and bounce away from goal. The ball comes back to Mahrez, though, and he puts an almost identical cross into the box for Sane this time, and the German chests it beyond Foster at the back post.
It is a wholly deserved lead, but Ben Foster in particular is unfortunate to be on the losing side at the moment having made a string of brilliant saves in the opening 45 minutes. City have just been too relentless, though, and the goal eventually came.
Mahrez had delivered an almost identical ball for Silva moments early, but this time Watford could not stop it as Sane bundled the ball home - just one attack too many for the hosts.
The keeper has made brilliant saves to deny Sane and Mahrez when one on one, while the latter chance also saw him recover to thwart Bernardo Silva and David Silva from the rebounds. Jesus has also seen an effort saved by the keeper, but he could do nothing about the opener.
Doucoure hooked the ball back into the area and Deeney was the wrong side of the defence, meeting the dropping ball with a half-volley. Ederson reacted well to save it, though, and the Hornets may not create a better chance.
Sane gives the ball to Silva, who in turn slides it down the channel for Jesus. The striker pulls a low ball back into the box, where Mahrez is waiting to sweep his finish home.
.@ManCity look unstoppable! 🔥@Mahrez22 gets in on the act for his 7th Premier League goal against Watford!
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Android: https://t.co/vtRKuD28cm pic.twitter.com/gflZxZt2hP— Sky Sports Premier League (@SkySportsPL) December 4, 2018
Riyad Mahrez (4) is the first visiting player to score a Premier League goal at Vicarage Road in more than three different matches. #ManCity @Mahrez22— Gracenote Live (@GracenoteLive) December 4, 2018
Delph gave the ball away inside his own half and Deulofeu races down the right flank before putting a ball into the box. It initially looks as though the chance has gone for Doucoure, who got his head to the ball first and then poked it goalwards and saw his effort blocked by Walker on the line. However, the rebound falls kindly for him again and he bundles it over the line from point-blank range!
City seemed to be cruising to another victory courtesy of goals from Leroy Sane and Riyad Mahrez either side of half time, but Doucoure's late strike just gave the hosts a glimmer of hope.
Thank you very much for joining Sports Mole for tonight's Premier League clash as Man City survive a late scare to move five points clear at the top of the table. I will leave you with our match report, and be sure to stick around for reaction too.
From me, though, it is goodbye for now!