The champions moved to within two points of leaders Arsenal with a 4-1 victory over Mikel Arteta's side at the Etihad Stadium on Wednesday.
Goals from Kevin De Bruyne, Erling Haaland and John Stones did the damage in a one-sided contest.
Man City have two games in hand on Arsenal and are now favourites to win a third straight Premier League title.
Having played second fiddle to Arsenal for much of the campaign, Guardiola knows his side are now in pole position to reclaim top spot after the big win.
"We cannot lose our focus. Now it's in our hands," said Guardiola.
"These next three games will dictate if we can do what we want to do. The reality is we're still behind Arsenal.
"It will not be easy for us, but it is game by game and we see what happens.
"When it's in our hands, we have to use it."
"The players know it is necessary to say it is close and we need to win to stay in contention," added the former Barcelona and Bayern Munich boss.
"That mentality where you have no option but to win is the best mentality to play. The players have shown they go into every match trying to win."
Man City are still in the Champions League and will also face Manchester United in the FA Cup final on June 3.
