After the high-noon showdown between Liverpool and a United side lacking in any great ambition ended in goalless stalemate at Anfield, City cashed in with a third straight league match at the Etihad in which they have struck at least five goals.
Pep Guardiola's men became the first team to net 29 goals in their first eight league games of a top-flight campaign in England since Everton 1894-95 as some of their main title challengers faltered.
Their sixth consecutive league win moved them to 22 points with United on 20 and Tottenham Hotspur staying third on 17 after finally earning their first home win at Wembley Stadium, 1-0 over Bournemouth with a Christian Eriksen goal.
Sensation of the day came at Selhurst Park where Crystal Palace, hitherto without a goal and point to their name, downed champions Chelsea 2-1 with Wilfried Zaha, returning from injury, scoring a fine winner just before the break.
New manager Roy Hodgson celebrated his first win in charge as Palace finally got in the scoresheet - a Cesar Azpilicueta own goal had given them an early lead before Tiemoue Bakayoko equalised - after 731 minutes without a league goal.
Arsenal were surprisingly toppled too as Watford came from behind to snatch a 2-1 win with a 71st-minute penalty from Troy Deeney and a stoppage-time strike from Tom Cleverley, which lifted the Hornets to the giddy heights of fourth on 15 points.
The shock defeats left fifth-placed Chelsea and Arsenal both nine points behind leaders City, whose current brand of kaleidoscopic football makes them favourites to regain the title they last won in 2014.
Gabriel Jesus, with a brace, Raheem Sterling, David Silva, Fernandinho, Leroy Sane and Bernardo Silva all found the target in the demolition of Stoke with the side now looking like a proper Guardiola creation.
The orchestrator of the exhilarating triumph did not even get on the scoresheet, but not for the first time this season Kevin de Bruyne was hailed the man of the match for his part in four of the goals.
"We didn't lose easy balls, we play fast and simple. That's why I am very pleased. It is the best performance since I am here," Guardiola told the BBC.
"He [De Bruyne] is one of the best by far, he is someone who produced a lot of actions. He is dynamic."
STARK CONTRAST
City's dazzle was a stark contrast to their neighbours' safety-first approach in the underwhelming Anfield game during which the only Manchester United highlight was David de Gea's great save to deny Joel Matip.
Liverpool, despite being much the better side, were blunt in attack, failing to convert any of their 19 attempts on goal.
"Manchester United came here for a point and got it," said Liverpool manager Juergen Klopp with a sigh.
Not that United's manager Jose Mourinho would entertain the idea of it having been a bit of an anti-climactic affair.
"It depends on what is an entertaining game," he said. "One thing is an entertaining game for fans, another thing is an entertaining game for people who read football in a different way.
"For me, the second half was a bit of chess but my opponent didn't open the door for me to win the game."
Chris Wood earned an 85th-minute equaliser for Burnley in a 1-1 draw at home to 10-man West Ham United, who had Andy Carroll sent off in the 27th minute after a couple of elbowing offences earned him two yellow cards.
Swansea City forged clear of the relegation zone with only their second league win of the season, a 2-0 victory over Huddersfield Town.
