City are on a seven-match winning run in all competitions and could pull level with Premier League leaders Chelsea with victory over Palace on Saturday.
Palace, meanwhile, have just one win from their last 10 top-flight matches, and Warnock knows his side will need to be at their best to stand a chance of picking up a positive result this weekend.
"They are just hitting their form," he said. "It is always difficult to go to the Etihad - they play some wonderful football, but we have been playing well, so we do not go there with any fear.
"But we realise we have got to be on top of our game to come away with anything. We know our goalkeeper and our back four have got to play well and we have got to create chances.
"We have got to know what we are doing and be on top of our game - we have done that well recently but we step it up another gear now.
"We did well at Swansea (1-1) and Tottenham (0-0), but now this is another challenge. We are going to the most difficult place, along with Stamford Bridge, so it is a good challenge for us."
Warnock will take a modicum of comfort from the fact City currently have a host of strikers sidelined.
Sergio Aguero (knee), Edin Dzeko (calf) and Stevan Jovetic (muscle) are all unlikely to return before the end of the year, with 18-year-old Jose Angel Pozo having stepped into the side for a 1-0 win at Leicester City last time out.
However, Warnock has laughed off talk of an injury crisis, stressing City have the strength in depth to cope with the absences.
"Aguero is as good as anything, him and [Chelsea striker] Diego Costa are probably the best two in the Premier League," he added. "But if they wanted to give me Samir Nasri and David Silva I would take them tomorrow.
"I think they are as good as anybody in the country, those two.
"The difference between the top clubs and everyone at the bottom end is that every player in the 25 is a top international player who can play in several positions."
Palace, who have not won at City since 1990, will be without Marouane Chamakh, ruled out with a hamstring problem, while Adrian Mariappa has returned to training after a knee injury.
In addition to Aguero, Dzeko and Jovetic, captain Vincent Kompany (hamstring) is expected to miss out for City.
