Thanks Bostock; corrected.
Addressing the overcrowding, well, is usually counterproductive. The only ways I know of to do it is to whip the people (under Slavery); You can reassign what tiles are worked to either starve (not a good idea) or put them in a stagnant condition, and click the button to avoid growth. Of course, none of those (save whipping) help much if they're already overcrowded.
I usually look to build health-bonus improvements, or, if I can't do that, try to make a few new trades (or cancel a few) to gain some health improving resources.
A related question from me would be, what's the BLUE MIST I often see flowing out of a city? It's temporary. Maybe related to a unit available for promotion there?