This can be also for their coach's fault.
After Barcelona Guardiola didn't do so much and didn't went so far on Champions with Bayern an City, maybe one semifinal in 8years.
This could be a fault of the manager no doubt, as pep Guardiola probably hasn't been superb in the UCL since he left camp nou, but another thing you must understand is that Manchester City are yet to make the champions league their "home", they cannot be fully called a Uefa champions league team.
City have been steadily growing in the UCL and you must also note that it takes time to climb up the ranks in the UCL and I do not think there is a better coach to take them to glory than pep Guardiola.
I hope if he doesn't do that this season, he'll till remain at the etihad and try again, they seem to be edging closer.