Personally I don't think the empire was fighting a city in particular during that cutscene. The way the dragon are reacting, the absence of other people, it kind of look like the empire happened to fly near a dragon nest and was attack by those dragons. At least that's the impression i have.

The important part of the cutscene seem to be the crash. Between the land that was ravaged to look how it look now, the pillar of light and the primals who went to different place of Eorza, i think that the primals were sealed in Mor Dhona and freed by the crash. Still with the current cutscenes in the game and the little bits of story, there's no way to really know what exactly happened.