Kevin De Bruyne crossed for David Silva to tap in from three yards to open the scoring inside the first minute.
Sergio Aguero doubled Man City’s advantage six minutes later from the penalty spot, before Riyad Mahrez's deflected free-kick made it 3-0.
Bernardo headed in the fourth, with Nicolas Otamendi sliding in a fifth as Man City went 5-0 up in a Premier League record of 18 minutes.
It was 6-0 on 49 minutes through Bernardo, before he completed his first PL hat-trick on the hour mark.
De Bruyne added a stunning eighth goal late on as Man City stay in second place, two points behind leaders Liverpool.
Watford remain bottom with two points.
Man City: 28 Sep v Everton (A)
Watford: 28 Sep v Wolves (A)