For a long time "City of the Dead" was one of the most popular Clash songs not to be released on any album - it only appeared as the B-side to 1977 single Complete Control. It was then included on the rarities compilation album Black Market Clash, and it's expanded re-release, Super Black Market Clash.
Singer Joe Strummer admitted in later interviews that around mid-to-late 1977, he was suffering from severe clinical depression and was incredibly disillusioned with the future of the Punk Rock movement. This explains why the lyrical themes of this song in particular, as well as another B-side from around this period, "The Prisoner," are very dark and cynical.
The title "City of the Dead" is drawn from an obscure 1960s British horror movie of the same name starring Christopher Lee. Guitarist Mick Jones would frequently introduce it live as being a song about "being dead from the neck up," a nod to common zombie horror film convention.
The latter verses relate to a common trend in 1977 of "Punk Bashing" where, partially as a result of hyperbolic tabloid reporting encouraging violence against Punk fans (including a shameful piece in the 6th June edition of the Sunday Mirror entitled "Punish The Punks"), there were many fights and attacks on Punk rockers:
"What we wear is dangerous gear
It'll get you picked on anywhere
Though we get beat up we don't care
At least it livens up the air."
High-profile victims of brutal attacks included Jamie Reid, Sex Pistols singer Johnny Rotten, and Clash guitarist Mick Jones, who tells the story of his attack in the 2002 documentary film Westway to the World.
The lines, "Don't you know where to cop, that's what New York Johnny said" were written in response to several unsavory incidents with drug abuse on the Anarchy tour in 1977, with the 'New York Johnny' being the American Rock frontman Johnny Thunders, formerly of the New York Dolls and at the time leader of Johnny Thunders and the Heartbreakers. According to reports, he was regularly doing drugs on the tour and would try to intimidate others - including members of The Clash - to shoot up drugs with him.
The lyrics "Fall in love an' fall in bed, it wasn't anything you said, except I know we both lie dead" could have been inspired by Mick Jones' fractious relationship with his girlfriend at the time, Slits guitarist Viv Albertine. According to roadie Johnny Green, "she broke his heart... Mick used to cry and cry about Viv. He played the rock star normally with girls, but not with Viv, he really loved her." His breakup with Albertine would later form the basis for the lyrics to 1979 single "Train in Vain (Stand By Me)
"City of the Dead" is the first Clash song to feature additional instrumentation beyond just the bass/guitars/drums/vocals quartet. In this case, the recording features saxophone and pianos, the latter played by Steve Nieve from Elvis Costello and the Attractions. The Clash were at the time greatly influenced by Bruce Springsteen, and this influence can be heard in the rich production and musical style.