Only a couple of options available.
1. Starve population down as low as you can, then at size one, build a settler. This will disband the city.
2. Sell all improvements and let the AI have the city (barbs preferred).
3. Don't have a city wall and capture/lose/capture/lose the city to the AI (note that this results in a lot of free tech for the AI).
Many posters on this board have asked for the "Disband City" concept to be added to Civ 3. Wait and see.....
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