The Blues struggled to create chances against a dogged Wolves side, who defended deep and restricted City to few moments in front of goal, with Julian Alvarez needing a 22-yard free-kick to find an equaliser.
But Dias' own goal had put the hosts ahead and Hwang Hee-chan scored after the break to restore their lead, with City then never looking likely to get back into the game.
Guardiola, who was sat in the stands for the defeat as a result of a touchline ban for three bookings, said his side lacked their usual fluidity in attack because they didn't follow the processes for attacking a side playing a 5-4-1.
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