Unless it's the capital city. Or is that just in ToT?
A spy acts the same way in both versions. The only thing a spy cannot do is bribe a capital. You can still poison the water supply of a capital. If you starve a city down to 1 citizen, it usually has to disband its units unless the units inside the city are supported by another city.
@ Albe182 Why would you not want to take it? If there are no troops in the city, you can just let the city sit there and just keep destroying any new troops it builds. If there are barbarians nearby, you can let them have the city. If your goal is to disband it, then take the city right away. You will get more gold from capturing the city at a large size than from a smaller size. Once you capture the city, you can change all of the workers to either entertainers, scientist, or tax collectors. That will starve the city down. You can also build engineers to disband the city. You can use these to build other cities. If you are going to keep them you will want to "home" them to other cities or they will disappear when you do disband the city.
If you capture a city the walls are usually destroyed. Let the AI have it back. Every time that the city changes hands it looses a citizen. That would probably be the fastest way to "shrink" a city. If the AI has no troops in the area, then you will have to do all the work either way. If you want to starve down the city before you take it, you need enough troops you can fortify on every square of the city and depending on the size it will eventually loose 1 citizen per turn.
If the PSX version is the same as the PC though, capturing a 1 size city should destroy the city. If the city is a size 1 city and there are still a lot of units left (not supported by the city) and the city does not have walls, destroying just one unit will destroy the city and the other AI units will be left in a "stack" on the tile. You can then take out one of the units and the rest will be destroyed.