The encounter also saw Kelechi Iheanacho benched for the entire duration of the win.
A goal in each half from Pablo Zabaleta and David Silva ensured Pep Guardiola's men returned to winning ways ahead of their crunch clash against Arsenal at the Emirates on Sunday.
Pablo Zabaleta opened the scoring just after the half-hour mark with an easy tap in at the back post after latching on the end of Kevin De Bruyne's cross.
David Silva wrapped it up in the 86th with a swift counter-attack smashing home De Bruyne cut-back to keep Pep Guardiola's side fourth in the table, seven points adrift of leaders Chelsea.
Ighalo who got into the starting line due to an injury to Stephano Okaka failed to make the most of the chances that came his way in the encounter.
The win was Manchester City's first in their last four games and also their first at the Ethiad stadium in six weeks.
While for Ighalo, it was his 13th appearance for the Hornets who dropped to 11th on the log.
The encounter also saw Isaac Success make a return to action for Watford FC after two months on the sideline.
Success came on for Daryl Janmaat in the 66th minute of the encounter for his seventh appearance of the campaign.
At Selhurst Park, Zlatan Ibrahimovic grabbed an 88th-minute winner for Manchester United who recorded a 2-1 victory over Crystal Palace in Wednesday night's EPL game.
The win was Manchester United second straight win of the EPL season.
James McArthur cancelled out a Paul Pogba strike in the 66th minute but Ibrahimovic netted two minutes from time to hand the Red Devils their seventh win of the campaign.
Jose Mourinho's men are in sixth position, six points behind fourth-place Manchester City in the league table.
In other results, Stoke City drew goalless at home to Southampton while Tottenham Hotspur thrashed Hull City 3-0. At the Hawthorns, West Bromwich Albion thanks to a hat-trick from Salomon Rondon defeated Swansea City 3-1.