Second-placed City would have reduced Arsenal's advantage to two points but instead were frustrated as their winning streak in all competitions was halted at eight.
Arsenal took a seven-point lead at the top of the Premier League after a scoreless draw with Nottingham Forest on Saturday.
In Lille, substitute Olivier Giroud turned the game on its head in the 80th minute.
Man City ease to 3-0 win over Liverpool as Guardiola celebrates 1,000th game in style
'Disorderly conduct, riots, injured police officers, and damage to infrastructure -- this is not a soccer game, this is a breach of order and serious violence.'
Lyon thump Maccabi Tel Aviv to go top, Forest keep on winning
British Prime Minister Sir Keir Starmer, who is on a two-day visit to Mumbai, was joined by English football great Michael Owen.
Cash on target as Villa hand Man City their first defeat since August
Paris St Germain played out their first goalless draw of the season at Athletic Bilbao on Wednesday but stayed in the driving seat for direct qualification for the Champions League last-16 after a string of fine saves by home goalkeeper Unai Simon denied the defending champions.
IMAGES from the Premier League matches played on Sunday
Substitute Gabriel Martinelli scored a late goal to help Arsenal hold Manchester City to a 1-1 draw in a blockbuster English Premier League fixture, in London, on Sunday.
Nottingham Forest handed manager Sean Dyche the perfect debut with a 2-0 home win over Porto in the Europa League on Thursday, with both goals coming from the penalty spot.
Grealish made only seven league starts last season and was not included in City's recent Club World Cup squad.
Manchester United have agreed a deal to sign goalkeeper Senne Lammens from Royal Antwerp on a five-year contract for 18.1 million pounds plus add-ons, according to British media reports.
Second-string Liverpool were thumped 3-0 by Crystal Palace as Ismaila Sarr struck twice for the visitors in the League Cup on Wednesday, booking the London side's spot in the quarter-finals and piling more misery on Arne Slot's struggling side.
Villa remain fourth on 56 points, three points above Spurs in fifth, having played a game more. West Ham are seventh on 44, three points behind sixth-placed Manchester United who have a game in hand.
Arsenal maintained a searing pace at the top of the Premier League with a straightforward 2-0 win at Burnley, while Liverpool snapped a dreadful four-match losing run with a 2-0 victory over Aston Villa to climb provisionally to third.
Smith, who developed a reputation for playing exciting, attacking football at Brentford, is a Villa fan and will replace Steve Bruce, who was sacked last week following the second tier side's dismal start to the season.
Aston Villa have terminated the contract of manager Steve Bruce following a dismal start to the season, the English Championship club said on Wednesday.
Manchester United manager Ruben Amorim would have enjoyed some relative calm during the international break after backing from club co-owner Jim Ratcliffe but will find himself in the Premier League maelstrom once again at Liverpool on Sunday.
Ole Gunnar Solskjaer has turned down the chance of managing Aston Villa, a spokesman for the English Premier League said on Tuesday.
Aston Villa have sacked manager Roberto Di Matteo, the Championship club said on Monday.
Bayern Munich made it 16 wins from 16 games this season to underline their credentials as early Champions League favourites, beating holders Paris St Germain 2-1 away as Luis Diaz scored two goals and was shown a red card on Tuesday.
It took 10 Premier League games for the first cracks to appear in Manchester City's facade last season, but Pep Guardiola got a much earlier reminder of his side's fall from grace on Saturday in another defeat to Tottenham Hotspur.
Alexander Isak accused Newcastle United of breaking promises and misleading supporters in a social media statement on Tuesday.
A summary of Saturday's action in the Premier League.
A summary of Saturday's action in the Premier League.
A round-up of Tuesday's Champions League quarter-finals second leg between Barcelona and Dortmund, Aston Villa and Paris St Germain.
League Two (fourth tier) side Stevenage pulled off the shock of the weekend by winning 2-1 at Premier League Aston Villa.
Mohamed Salah had already clinched the Premier League Player of the Season award, the Golden Boot for most goals scored and the Playmaker award for most assists, making him the first player to win all three awards in the same season.
Aston Villa's relegation from the Premier League for the first time and from the English the top flight after 28 years leaves Bikash Mohapatra/Rediff.com with a tinge of regret.
Champions Chelsea were held to a 1-1 draw by Aston Villa, Liverpool lost 2-0 at Bolton Wanderers and Arsenal rallied to beat Charlton Athletic 2-1 in Saturday's Premier League matches.
Former Chelsea and England captain John Terry has joined Championship side Aston Villa, the club's owner said on Monday.
Premier League leaders Liverpool needed Trent Alexander-Arnold's second-half equaliser to secure a 2-2 draw at Aston Villa on Wednesday that lifted them eight points clear at the top.
The number of Premier League games called off this month due to COVID-19 is now up to 14
Tottenham Hotspur cruised to a comfortable 5-1 victory over Aston Villa at White Hart Lane on Sunday
Images from the English Premier League matches played on Sunday
The move came after Manchester-born Rashford, who made 426 senior appearances and scored 138 goals for United in all competitions, fell out of favour with manager Ruben Amorim.
Aston Villa sacked manager Paul Lambert.
Neville said that within next week or two, Manchester United will have to "magic up a bit more money" or bring someone on loan.
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