The title is from Augustine

Rating: Null/10 (29 September 2011)

Great film. It is named after the Rio de Janeiro neighborhood where it is set. But there is a second meaning. The neighborhood was named City of God after a concept in Catholic and early Christian thinking.
City of God was originally the name of a book written in Latin in 410 AD by St. Augustine of Hippo, a Roman Christian philosopher. The book was written at a time when the then-Christian Roman Empire was in decline and in threat of destruction. Many Romans believed that the original Roman gods were punishing Rome for abandoning them in favor of Christianity. Augustine did not agree.
In the book, Augustine states that the fate of the City of Man, the earthly city, is insignificant. The City of God is built in the afterlife by people who are dedicated only to serving God. God's servants will not mind the destruction of the earthly society since they will live forever in heaven.
How this applies to the movie, I am not quite sure. The events seem a bit reminiscent of the fall of Rome what with the corruption, violence and drug use. It might be an ironic or sarcastic sense, or perhaps a reference to the fact that many in the film do not seem to fear death. I am sure there is some connection beyond the neighborhood name.
As an aside, the concept of the City of God was referenced by both Reagan in his "City on a hill" speech and Mario Cuomo in his "Two Cities" speech.