ETIHAD STADIUM - MANCHESTER
Watford completely dominated the first-half, with Giuseppe Sannino's tactics bamboozling the Blues and causing them all sorts of problems. They had runners in every area of the pitch, and goals from Fernando Forestieri and the excellent Troy Deeney gave them an unlikely but thoroughly deserved half-time lead.
Pellegrini responded with a tactical shakeup of his own, and City began to improve. Aguero's hat-trick and a long-range strike from Aleksandar Kolarov ensured City progression to the fifth round.
Here we look back at the major talking points from City's FA Cup scare.
Cometh the hour, cometh the man.
Sergio Aguero scored three second-half goals to rescue this cup tie for City; further underlining his importance to the side. His form and fitness are crucial to City's chances of winning silverware this season.
His pace and constant running gave City the impetus after a lacklustre first 45 minutes, and he provided the key to this victory, with three confident, world-class finishes the difference between the two sides.
City's strength is in attack, and they have now scored 110 goals in all competitions, with Aguero grabbing 25 of them. He's having his best season since his switch to Manchester in 2011.
Pellegrini admitted afterwards he wanted to rest him after 70 minutes, but such his importance he couldn't afford to.
There have been times this season where Manchester City have looked solid defensively, but there have also been times where they have been woefully exposed—and the first-half of this match was the latest example of their frailties at the back.
A Watford side containing just one player who cost a fee—Troy Deeney at £500k—caused them all sorts of problems, with Martin Demichelis and Joleon Lescott, City's centre-back pairing for the day, struggling to cope with the neat passing and movement of Watford's attacking players.
Vincent Kompany's introduction, which saw Demichelis move into midfield, shored things up for City, and he remains their key player at the back.
Even more so than Aguero, his fitness is all-important to City's chances of success.
After impressing for the last month with his improved all-round performances, Edin Dzeko gave a reminder against Watford just how poor he can be when he's having an off day.
Man City will feel like they got away with one today. Didn't play well but won anyway. Aguero excellent, Dzeko not so much.— Rob Dawson (@RobDawsonMEN) January 25, 2014
His touch and finish deserted him, and he failed to impose himself on the Watford defence.
In recent weeks, he has been causing teams problems with his ability to link play and hold the ball up. His finishing in that period has been devastating, with a number of first-time strikes emphasising his growing confidence.
This was a step backwards, but City will be hoping it's just a blip. Competition for places is vital for a side trying to win multiple competitions, and they need all three of their main strikers in form.
After his dazzling display against West Ham on Tuesday, Marcos Lopes once again started for City in a cup match and looked impressive. This lad looks set to have a bright future at the club.
He has outstanding close control and a great appreciation of space, able to receive the ball in tight areas and invariably retain possession. He looks sharp, confident and determined to prove himself.
He appears to have an exceptional work-rate as well—a vital ingredient when playing at the highest level. There was a moment in the first-half where Watford broke away after a City corner, and with Demichelis the only man back for City and left horribly exposed, it was Lopes who came sprinting back to add extra bodies to their defence.
He looks a very special talent—an exciting prospect for the City fans who have traditionally enjoyed seeing young players come through the ranks and play first-team football.
After his substitute appearance in the second leg of the League Cup semi-final on Tuesday, Stevan Jovetic was given another chance to shine in this match, replacing Lopes just before the hour mark.
It has been an incredibly frustrating start to life as a City player for the young Montenegrin, with a series of injuries disrupting his progress. However, back-to-back appearances will have improved his confidence considerably.
He looked good in his cameo today, often dropping deep to pick the ball up between the lines and run at the Watford defence. He clearly has a great footballing brain, with intelligent movement and excellent vision his defining features.
With City's fixture list set to get congested as their involvement in four competitions continues, options in every area will become increasingly useful to Pellegrini.
Jovetic may well have a significant role to play in the remainder of the season.
After a slow start to the early period of his City career, Jesus Navas continues to improve, with his importance to the side growing week on week. With Samir Nasri out injured, it's good news for City that their flying Spanish winger has hit some excellent form.
One of the keys to his improvement has been the understanding between himself and Pablo Zabaleta. They attack and defend in harmony, combining brilliantly well down City's right-hand side, with their energy, tenacity and work-rate making a real real force.
At the moment, they are undoubtedly City's first-choice pairing down the right.