The one city challenge brings out the best of the best in players. It is when you are limited to just playing in one and only one city. This Once City Challenge, or OCC, is very limiting of the human player so that they can only work with one city which makes the game much more difficult.
It limits what players can do and also limits what they cannot do such as building more cities. Some like such a challenge and thrive on seeing what they can accomplish in just one city while others are not happy about it and feel that they are very stifled. The good thing about it all though is that it is a self-imposed challenge and that you don't ever have to do the game with just one city if you don't want to which is nice.
I personally love playing one city because I feel that I am encouraging myself to do what I can within the limits that I have placed upon myself. Not everyone shares that thought though. Whichever way you perfer to play, you are able to.