you have to starve it and make a settler when the city is pop 2 and has growth, ya gotta time it just right. (which sucks, they should have a disband option at least in the editor)
Slight correction. A city can be abandoned when it is size two (as previously mentioned) but only when it has no growth. If there is any growth the game will wait to produce the settler and not abandon the city. If needed change workers to entertainers or tax men to ensure that there is no growth.