Riyad Mahrez fired City to a 1-0 win at Chelsea to cut the deficit to the leaders back to five points.
Less than three minutes after coming on as substitutes, Jack Grealish teed up Mahrez for the winner which keeps Arsenal firmly in their sights.
Guardiola had earlier sent on Rico Lewis and Manuel Akanji for Kyle Walker and Joao Cancelo in a bid to liven his side up following a lacklustre first half.
“The first half was sloppy,” he said. “We didn’t create much, our pressing was so poor we were not well organised and in the second half especially with Manuel and Rico we were better.
“I am a genius. Because after Everton I was asked why I didn’t make a substitution until 81 minutes. I thought about that today and made some.
“We could lose here, but now we have a five-point gap. We have three less points to play for. It means a lot but we have to prove ourselves so because it is normal to be in this position after four Premier Leagues in five years.
“We have the mindset that in November the people believe we are already champions, and this is impossible.
“Other teams that don’t have this pressure because people say in September that City are going to win.
“After four Premier Leagues in five years it is not easy to push them again. That is why I am satisfied after what happened in recent years.
“We’d prefer to be closer but with the way Arsenal play they deserve to better. For us it was so important, especially in the second half, to be aware that we can do it again and again and again.”
Blues boss Graham Potter was left sifting through another catalogue of injuries.
Already without six players, including Reece James and Mason Mount, their evening got off to a bad start when Raheem Sterling was caught by his old City team-mate John Stones in the opening moments and limped off.
Moments later Christian Pulisic also had to go off after his was on the end of a Stones block.
“It doesn’t make it any easier,” admitted Potter, whose side have won just once in their last eight matches.
“Raheem’s was the first action of the game, a backheel, a strange one, and Christian was at full pelt and hurt his knee.
“Mason got a kick yesterday. I’ve never experienced anything like it but it is what it is, we have to carry on.
“I thought there was a lot right today, the performance level was good against a top side. There was a lot to like.
“Is our form good enough? Points wise, no. It’s hard for me to argue against that.
“But the margins and the situation, for me it’s about how we play and analysing how we can improve. We took a step forward today.”
Pierre-Emerick Aubameyang, who came on for Sterling, did not look best pleased at being substituted himself with more than 20 minutes left.
“He came on after one minute,” added Potter. “He hasn’t played for us in a while and he put in a shift for us.
“It’s a decision you have to make. He gave everything for the team but he was fatiguing, and that was the decision.”