Daly, employed as a full-back during the Lionesses’ victorious European Championship campaign, was in clinical form up front as she inspired Villa to claim their first ever top-flight points against the visitors.
City looked to have ridden the storm when they fought back from 2-0 down to lead 3-2 at the start of the second half, only for Villa to rally with Daly poking home the winner 14 minutes from time.
Gareth Taylor’s side struggled in their first match since the world record departure of Keira Walsh to Barcelona, and Daly played her part in a 22nd-minute opener when she dispossessed Laia Aleixandri and let in Alisha Lehmann to drive on and fire low past Ellie Roebuck.
Khadija Shaw spurned a good chance for City before Villa doubled their lead just past the half hour mark when Daly curled home a brilliant shot on the turn after the visitors failed to clear a corner.
City have been hit by a raft of exits with Walsh and Lucy Bronze (both Barcelona), Georgia Stanway (Bayern Munich) and Caroline Weir (Real Madrid) high-profile departures to Europe, while Ellen White, Jill Scott and Karen Bardsley all retired.
But they grabbed a lifeline on the stroke of half-time when Villa goalkeeper Hannah Hampton allowed a Laura Coombs shot to slip through her grasp.
And they looked like making Villa pay after grabbing two goals in 90 seconds at the start of the second half, Shaw heading the leveller before Coombs scored her second with a crisp finish from Chloe Kelly’s right-wing cross.
But three minutes later Villa were back level when Kenza Dali capitalised on a sloppy ball out from Steph Houghton and fired past Roebuck with the help of a heavy deflection off Alex Greenwood.
Roebuck was at fault for the winner when she spilled a Kirsty Hanson cross and let Daly in to claim the simplest of winners.
Additional reporting by PA.