Raheem Sterling headed home Phil Foden's high cross, before Bernardo Silva hammered home a near-post finish to make it 2-0 after half an hour.
Manchester City squandered chance after chance after that, but the Portuguese international made it 3-0 in the second half with a beautifully curled finish into the top corner.
Cucho Hernandez finished well after his first effort came back off the post to make it 3-1, but that's how the game ended.
Here's how we rated the players as City went top of the Premier League...
Ederson - 6
It was going very well until the goal, which he should have done better on. He stays on 99 clean sheets, but not for too long I’m sure.
Kyle Walker - 7
Looked pretty dangerous going forward and kept João Pedro quiet. They’re the two most important things and Walker achieves them consistently.
Ruben Dias - 7
Solid as ever, as you’d expect from such a great defender. Kept the ball so well alongside Laporte under the threat of the Watford press.
Aymeric Laporte- 8
Blocked an awful lot during those periods that Watford woke up and caused City some problems.
Pretty unlucky not to score, both when his volley curled over the bar and when his other close-range effort was saved from Bachmann.
João Cancelo - 7
No real moments of magic today from the left-back. But when you complain about that, you know you’re spoiled.
He also let Cucho Hernandez in behind him for the goal, which was a disappointing one to concede.
Rodri - 8
A fantastic performance as usual. He’s a delight to watch, which is a real compliment when you consider how simple his job is.
Bernardo Silva - 9.5 (MOTM)
Best player in the league right now.
Easy decision. He’s had better games, too - much better. But still, everything he did was just fantastic. It’s not worth describing the way he plays in writing - in Pep’s words, just take a video and watch him instead.
And that second one - what a goal.
Ilkay Gundogan - 7.5
Seriously dangerous in the buildup but not so much in the final third. Overall though, a pretty strong performance.
Raheem Sterling - 8
Had so much time so often and should have had a handful. But you can’t complain about the fact that he started the game with a goal.
Jack Grealish - 7.5
I love him down the middle, but he probably squandered too many opportunities in front of goal to earn the rating he could have got tonight.
He missed some chances, but he was definitely capable enough of making them, which is worth something.
Phil Foden - 8
Was lively. Was unlucky not to get a goal, party because of Bachmann’s great game and partly because he wasted a great chance in the first half. But then again, everyone on the team did.
Kevin De Bruyne - 6
Looked pretty sharp on the ball, but didn't do a huge amount with it. Not much to say now, but surely some big performances are inbound.
Riyad Mahrez - 6
Again, looked dangerous but the game had been wrapped up by the time he came on the pitch
Gabriel Jesus - 6
Again, not loads to say. It's hard to come on and make a difference when the game is so one-sided when you enter the pitch.
You can follow us for live updates here: @City_Xtra