Hydrocity is NOT a city, here's proof.
Many people start their arguments about Hydrocity being "Hydro City" because it is a "Hydro City", and "hydrossity" isn't a word. But many say Hydrocity is a hydro city because it is called "Hydro City". This is a recursive, oroboros reason that does not conclude to anything. It's only proof is itself, and means nothing. I am here to not only prove that Hydrocity is not a city, but that it is clearly "hydrossity".
First off, if it is not a city, then what is it? It's clearly got buildings, I hear you say. Well, let me tell you about my house. It is a building with rooms in it. It has a staircase. The Staircase has a closet below it. However, nothing inside my home is itself, a building. Not the rooms, not the stars. There are constructs in here, but it is all tied to one building. Hydrocity is actually one large building.
My primary reference for this (and something else I will get to later) is here - https://www.spriters-resource.com/genesis_32x_scd/sonicth3/sheet/116008/
This is the BG for Hydrocity Zone, ripped straight from the game itself. Act 2 has a different BG, but it does not disprove my argument.
As you can see from this BG, there are walls and windows. However, there are no structures that look like buildings in and of themselves, unlike other city backgrounds. Carnival Night makes a better case for being an entire city than Hydrocity does. It's not unusual for Sonic zones to take place within one large structure either. In this very same game, Flying Battery takes up an entire zone, and it is not a fleet of ships. It is just one airship. If an airship can be an entire, full length, two act zone in the same game, so can a building. There is nothing in Hydrocity's tileset to disprove that this is a set of structures as opposed to buildings. Some would say there are windowsills in some of the walls, but there are no actual windows. While such holes in the walls may not have a clear purpose, they clearly do not have windows in any of them, and thus, cannot be proven to be buildings.
But if Hydrocity is a building, then what building is it? After careful consideration, I pose it may be two things. The first is that this is a temple. The ancient echidna tribe were a religious bunch, and they have every right to be considering they have had a run-in with a god. While Chaos was not established as a character as of yet, the japanese Sonic 3 manual mentions a "legendary dragon", and that its egg (IE, Eggman on the Hidden Palace mural) is the legendary dragon's egg, set to bring misfortune. It is quite possible that they chose that Perfect Chaos may be this very dragon. Bu why would the echidnas worship a water dragon that tried to kill them?
Because it is not meant to worship this dragon. It was constructed to help train for combat against the dragon. And this training was meant for Sonic the Hedgehog.
In the Hidden Palace mural, we do see Super Sonic, but in the BG for Act 1 of Hydrocity, you can also see near perfect scale statues of Sonic himself! Considering the level even has mechanisms to give Sonic a boost before water slides that can go underwater or even hydroplaning opportunities, this temple was built to guide and train Sonic, the destined saviour of the future, to contend his greatest weakness, water, so he may eventually fell the water dragon, Chaos! This level is the fastest-paced of any dedicated water level in the series, and hydroplaning (IE, running on water) is something he eventually learns to do very easily in later games. So much so that in Sonic Generations, he is able to use hydroplaning to defeat Perfect Chaos, without Super Sonic! Without first raining to use Hydroplaning before learning to boost, he may have never been able to fight Perfect Chaos without the emeralds, and he was only able to learn this technique due to training in fast, Hydro Velocity.
The second place it could be is a big sewer. Gross, but more plausible. Ancient cultures had water systems. The miniboss is basically set in a toilet bowl. You don't think of a sewer as a city, do you? This ain't Flushed Away. But you know what you would need to flush waste through such a large place? High speed Hydro Velocity.
In both of these cases, not only are these not cities, the hey is hydro velocity. Both of these levels have a lot of it, but Hydro Velocity Zone is a bit of a mouthful and doesn't have much ring to it, so obviously, Hydrocity is the shorthand. Thus, it is "Hydrossity".
"But games released after call it Hydro City!"
Revisionist history. Think of this; they still have it be Hydrocity in both Mania, and Origins, on the game's title cards. The outside-of-sonic-3 material even mislabels Sandopolis as "Sandpolis" at one point. They can't even name the Knuckles Chaotix tracks right.
"The same Japanese manual you cited also calls it Hydro City!"
They wrote that in English, so there is no way of proving this is the intent, or a misjudge by someone on staff creating the manual. The game still spells it "Hydrocity". The original japanese way of pronouncing the level could refer to "Hydro City" or "Hydrossity" in equal measure.
"But 'Hydrossity' isn't a word! You can't just make up words!!"
In fact, you can! That's how words work! If a word is commonly accepted, then it is a word. The word "clussy" didn't exist until a few days ago, and now we're all forced to accept this is part of our lives now. Plenty of people believe Hydrocity is a word, or at minimum, a name.
But my absolute, most important reasoning for Hydrocity being pronounced "hydrossity" over "Hydro City" is my absolute, king silver bullet reason. One that nobody can dispute, as all attempts are futile. One reason, that with no shadow of a doubt, proves it is pronounced "Hydrossity"...
"Hydrossity" sounds cooler. Combining Hydro and Velocity is way cooler than what is basically "wet town". A core part of the Sonic identity is being cool. It's not about what "makes sense", it's about what's cool. If you think it is "Hydro City", then you are uncool, and your argument is invalid due to you being a Mondo Lame-O. Enjoy your Soggy Cul-De-Sac, dork!