Quote shorlunch:

I've heard that a city can only be destroyed only if it under 500 points. I've also heard that the city can be destroyed if it under 5000 points. Which one is it?

Neutral cities can be destroyed on tactical servers up to a rating of 500 (Link to the notes for build #900).

Quote shorlunch:

Also, to destroy the city, if I can, what do I need to do?

It's basically the same operation as if you'd capture that city, the button you click is the only difference:
http://1100ad.de/en/forum/view/30268/last#btm

Does that answer your question(s)?

Quote shorlunch:

Yes it answers my questions

Quote shorlunch:

know I can't destroy it and I can't move it because I don't have a city point - so I guess my plan is moot.

You could send some gold to a trusted alliance partner or vassal and have him move the city if it's over 500 in rating, or you could abandon one of your own cities, then capture and move the city in question.
The first option is quite realistic, someone always has a city point or is close enough, the second option ... well, it's possible.

Anyway, I wish you good luck with your plan.