Off the back of beating Southampton 3-1 last weekend, the young Foxes were in confident mood heading up to Manchester, but could not repeat the feat against the Citizens.
Left-back Seb Naylor opened the scoring midway through the first half and added his and the hosts' second on the stroke of half-time.
Mahamadou Sangaré struck to extend their advantage further in the second period, while a Kevon Gray own goal rounded off the scoring late on.
Now 14th in the PL2 table, remaining on 11 points from eight matches, it's Birmingham City up next at LCFC Training Ground next Friday. Three days before, Borussia Monchengladbach visit Seagrave in the Premier League International Cup (both 7pm GMT kick-offs.)
The details...
City: Bausor, Aluko (c) (Carr 63'), Gray, Amartey, Ali; Onanaye, Neale (Lawrence 46'); Richards, Golding, Briggs; Popov (Otchere 71').
Unused subs: Donohue, Khela.