In the second half, Pep Guardiola used his embarrassment of riches on the bench to bring on Raheem Sterling, and the decision paid off as Kyle Walker's perfectly placed cross left the England winger with an easy finish.
Earlier, Jose Mourinho received the response he had demanded from his United side following their humbling defeat at Huddersfield Town as an 81st-minute goal from substitute Anthony Martial preserved their ideal home record.
The league leaders have been in sparkling form in recent weeks and have now won seven league games on the bounce, making them firm favourites with many to go on and win the title.
Watford's giddy ascent, though, was checked with a 1-0 home defeat by struggling Stoke City - Darren Fletcher hit the target in the 16th minute - that dropped them to seventh on 15.
Leroy Sane put City ahead in the 10th minute and three minutes later, Jay Rodriguez equalised for the home side.
Substitute Sterling scored his ninth of the season in all competitions four minutes after coming with City's only late moment of concern en route to a 13th straight win coming when careless defending from Nicolas Otamendi let in Matty Phillips for a consolation.
The quick flurry of goals continued as City reclaimed their lead as an ambitious shot from Fernandinho deceived Ben Foster to trickle into the net and make it 2-1.
David Silva headed over when he should have done better with 26 minutes on the clock while at the other end Salomon Rondon did likewise from a ball in from the right from Rodriguez.
Grzegorz Krychowiak had another Albion chance shortly after the break when he spread the ball to Alan Nyom and advanced into the box to meet the full-back's cross with a tame header that was easily held by Ederson.
The Argentine defender tried to chest a cross back to Ederson, and Phillips pouched in to pull one back for West Brom in the 92nd minute.
The win means City have beaten the 10-match start of Chelsea in 2005/06 by goal difference and extended their lead to five points.
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Heathrow security files found on USB stick in street
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