You have to resarch raze city (its in one of the conquest techs IIRC). The option will be in the main city dialog (Clicking on the giant button in the middle lower part of the screen once the city is selected.
Our sovereign can move mountains and hurl fireballs but he can't light a match to burn down a town....
i agree; i really don't think this should require researching. one of the great things about the changes to settlement founding and population is that you can use a pioneer to build an outpost at a critical resource outside your influence, not build anything there, and then raze the settlement once your other cities have enough influence to control the resource. that way you can grab resources in the early game without the map getting covered with huge cities in the late game. this exactly how the game should work.
unfortunately, there are too problems with this at the moment.
- raze settlement has to be unlocked, so you can end up forced to keep a settlement longer than you want to
- the ai is not able to do it (as far as i can tell), so they build far too many settlements and struggle to get any high pop towns
i could turn this into a more general post about how the requirement to unlock and research everything in the game makes the early game incredibly slow and boring, but that's a discussion for another time.