Bernardo Silva scored twice in a 3-1 win that moved City to the top of the Premier League, following Sterling’s opener.
Watford pulled one back through Cucho Hernandez, who followed up his own shot after it rebounded off a post, to deny Pep Guardiola’s side a ninth clean sheet of the season.
Sterling told the City website: “(It was) good. Good game management, really disappointing to concede in the end but overall I thought we battled really well.
“We had a few chances we could have taken in the first half to finish it off but a great win in the end.”
City made the most of Chelsea’s defeat at West Ham earlier in the day with a seventh straight win in all competitions, climbing back above Liverpool who had won 1-0 at Wolves to briefly reach the summit.
“That’s all we can keep doing is keep winning football matches. That’s what this football club is built to do, we just need to keep doing that,” the City forward said.
He added: “It’s a winning team, a team that challenges every three days and we keep doing that, we’ve been doing that for many years now and we’ll keep doing that.”
Watford goalkeeper Daniel Bachmann remained upbeat after the match, insisting that games against the likes of Manchester City will not determine the success of the Hornets’ campaign.
“These aren’t the sorts of games that are going to define our season,” the goalkeeper told his club website.
“When the fixture list came out in the summer we always knew it would be tough to pick up points in this period, but we’ve proven we can compete with some of the league’s best in our last few games, which is very positive.”
He added: “The right team won today, but we tried until the end. It’s been a tough week for us, playing Leicester, Chelsea and Manchester City in quick succession, but the fixtures coming up are really important now.”