One neutral Champion was in the area of influence of my only city. I selected him to try to recruit him and when I did, I saw the new Lay Siege To City button.

Problem: the button was not greyed out and I could actually click it. As he was neat my city (which I suppose is a condition), he sieged it. A message of Lay Siege appeared in the city. I recruited the Champion to see if the siege would autobreak but it didn't happen and I had no way to break it and neither I could move the Champion.

Edit: forget anything you could have read prior edit about not being able to build in the city. Silly me forgot about the only 12  squares for level 1 city.