Good to see lot of debate happening here
I have been driving Fiat 1.3 MJD (in my Ertiga) for 1.5 years, and yes it has serious turbo lag. At times its difficult to drive in bumper to bumper traffic, as one can not just keep the RPM in the turbo range. Somehow I have learned the trick to negate this turbo lag by downshifting and allowing the car in creep mode ,before I hit the acceleration pedal. But yes, this requires practice and there's no fun involved. However beyond 2k RPM, the engine is on the swing and the turbo kick puts smile on the face. Now, if you are ready to tune this engine (boxes/chips/ECU remap), you will get reduced lag (tuning helps to reach 2k RPM faster than normal, thus lag is not felt) and more power.
If you like the stock setting, better choose City iDTEC which is better drivable in bumper to bumper traffic. But, then there's no rush of power unlike TC engines, its linear and enthusiasts may not like it.
My choice for Diesel variant: Ciaz (tuned engine) over City. But if I'm constrained to choose between stock, then City.
For petrol, IVTEC beats the poor 1.4 Ltr Ciaz petrol engine by all means. Ciaz petrol engine can not be compared with mighty IVTEC, long way to go MSIL.
My choice for petrol variant: No guesses, its City!
For other elements, we may have polarized opinions. Some may like sedate styling of Ciaz and some may like Sporty design of City. For features, space & comfort, these two cars beats every other C2 car by huge margin.
I just tried to put the differences between City & Ciaz per my experience, as lot of people are confused between these two cars while selection.
But, if I'm in market to choose the C2 segment car, neither will I choose City nor Ciaz. I will choose Linea T-Jet for petrol variant, and Vento for diesel (manual or DSG TDI) any day, for obvious reasons