1.) I agree with hanoi, however you also need to make sure that the city is not growing as well. (I typically start turning city workers into entertainers until the growth box reads 'ZERO GROWTH'.) Then I set the city to build a settler, pay for the settler to be completed in one turn, and you will have the option to disband the city on your next turn.
PS: if your city has more than one population, STARVE THE BASTARDS!
2.) As far as capturing and holding onto enemy cities goes . . . I don't. It requires far too much unit power to begin with, especially during the heat of war when every unit counts, and even if you do station multiple units in a captured city there is no guarantee that it won't switch back to the other side (eliminating your units in the process) on any given turn, especially if the city population is more than 20. (I lost three armies and eight or ten modern armor in one city on one turn in just this way, not to mention assorted ships and aircraft fortified there . . . it just doesn't payoff.)
Solution: use settlers. Make them as much a part of your battle-plan as armies. During wartime, a settler can carve out a settlement right in the middle of enemy controlled territory. I typically don't (remembering: one step = one square movement = one turn) but choose instead to bring them right up to the enemy's territorial line (zero movement points) and building there, then attacking again and using another settler to build again. You will need enough gold to wage this sort of battle, because you'll need to build a barracks (for unit repair) and possibly an airport (for reinforcements) on a one turn basis. (And probably more than once or twice if you're being heavily bombed.) Employing this sort of 'attack-build-attack-build' strategy, it becomes relatively easy to cut an entire country up into two, or even three parts at its narrowest points, thus cutting off 'zero movement' supply lines in ALL directions. Keep in mind that vacant territory left behind you can be big trouble if it still has railroads built on it, since this becomes a zero movement area for one and all. So fence it off with YOUR cities. Thank god a city can't be bombed or bombarded into obliteration, but remains at '1' no matter how many stealth bombers, battleships or missiles dump on you; not to mention getting your units 'off the street' and into a collective area that is far easier to defend than open country . . . especially for wounded units.
ES