I could see it being a special terraforming-like option that actively changes the planet type and applies specific restrictions and bonuses, the same as an Orbital Habitat.Hmmm. Yes. I would sort of agree. I suppose the degree of abstraction requires slightly screwy ways of thinking about what a pop actually is.
In which case, I would personally suggest that the best way of representing a city world would be, essentially, a set of (even) higher tier building that the current top tier.
They would obviously need reasonably significant resource generation, potentially akin to that of the current rare tech buildings. Having resources that are more difficult to generate like unity and influence be available on them would be sensible too.
New Galactic Food means that you could actually have no food production type buildings amongst these city world buildings. If possible, having a cost in food for them might be useful too (to simulate the greater population size.)
I don't think there should be any real requirements like habitability etc. beyond a tech/ascension barrier as is the case with habitats.
That way you can get a nice custom tileset, custom buildings, and specifically-balanced prices and production ranges for everything.
That, as a mechanic, would be a lot more flexible than a "add more layers of tiles!" one, too- Paradox could develop all sorts of specialized planetary roles if they wanted to so long as they had a mechanic to create them in place.