Honda city has a remarkable design. I am sending you a link of its engine details all please read it. Secondly, the fuel tank has been placed under the front seats and a space has been taken out in trunk, but, the biggest advantage is the low center of gravity, when the tank has fuel, on turns the fuel sways on either sides due to grvity and its momentum usualy pushes normal cars outwards, but in city, as the fuel is in the center so the G pull tends to work on minimum, (it turns rather into O axis point, or fulcrum point, just similar to the center axis of any tire, or crank shaft) therefore there is not mush firce left in the rear end to drift the car outwards. I hope i am able to make you understand.
Honda L-Series SOHC i-VTEC Engines for the new GD Honda Fit/Jazz
Above is the link, for city/fit/jazz latest ivtec engine 1.3 and 1.5.
Now as the weight is in the center, all four wheels tend to have more road grip.
Please do see this engine details.