There has been some drop in their form recently but it is no problem at all. I remember Manchester City having way worse times in one season and they were way behind the leader. But they still made an unforgettable comeback and won the title by a serious point gap.
City are used to winning the league from behind, they stay as close as possible to the top of the table, and once we get into the second half of the season, they hit top gear, start their long winning run, usurp whichever team in on top and then go on to win the league, they did it to Liverpool a couple of times and they did it to Arsenal last season.
Having said that, things might be different this season, but that is only if the other top clubs remain consistent, i am pretty sure there is no team in the league that wants City to win four in a row, but they have to stop them on the pitch, and we'd see how things pan out.
Manchester City is theoretically unstoppable with many top international stars playing with their national team and driving City to victories but sometimes even with an excellent coach and good players, there is moment of failure..
Regarding the performance of teams, I think Manchester City could resist in the long run and will get back their first spot and might win Champions League again. I find it as the best team and I keep voting early for it here to be the winner again and again.