Lol, yes, attacking from within a city is VERY buggy. In my present game, I'm playing as the Magnar with a custom Sov and 9 other Realms for a total of ten. Resoln is dead, conquered by the lack-luster might of the Magnar, and now the true might of the Magnar has conquered every city that the puny Lord Karavox of Kraxis owns... But he is not conquered... I actually know exactly where he is. I literally have the bastard imprisoned... And I can't kill him... Why?
Because he's actually imprisoned within the borders of one of my cities...
I guess at some point, a Ruins of Gandra (Level 4 Notable Location,) spawned right next to Karavox's capital city. Apparently he didn't have the necessary Domination tech to explore it, because his city was built around it. Inhabiting the Ruins of Gandra is Lord Karavox himself. He'd barricaded himself within the Ruins, and every time I attempted to move a unit or my Sov to attack, I'd get the "Notable Location Level Not High Enough," pop-up.
So, I went ahead and got the tech for it... Was only a couple levels out, not a big deal... So I waste like, 15 turns getting the tech, clear the ruins, then kill the bastard, right?
After clearing the ruins, my Sov, rather than killing him, apparently chose to seal Karavox within the ruins beneath the city, destroying any trace of them above ground. (Obviously I can still see Karavox standing in the one tile the city was built around. He even had the gall to summon a Vigilant Minion!)
Now all my plans for conquering the world have gone out the window, as Karavox, the immortal Channeler that he is, still somehow, from beneath the destroyed ruins, poses a threat to the entirety of my Empire... I'm gonna try using Curgen's Inferno to kill him. If that doesn't work, I'll move my army out of the city, let him capture it, then kill him.