Spurs travel to Arsenal in what promises to be one of the most intense north London derbies to date.
Despire sitting eight points behind Pep Guardiola's side, Davies remains confident Tottenham can mount a serious title challenge this season.
'My focus is on Arsenal, of course there is no margin for error,' said Davies.
'City are a top side, they have set the benchmark this year and now we have to be on top and clinical in every game.
'We have to try and keep picking up the points to catch them.'
A huge boost for Spurs is that Harry Kane, Dele Alli, and Harry Winks will all be fully rested after missing England's recent international friendlies against Germany and Brazil.
Davies added: 'The boys have had a few niggles here and there and sometimes these friendlies can be one game too much with the programme coming up.
'If it means they are fresh for us on the weekend then we can be happy for that.'
The left-back is also delighted with the form of Christian Eriksen, who recently scored a hat-trick for Denmark.
‘Chris [Eriksen] is phenomenal for us. He dictates the play and gets us going. For me it is no surprise to see him scoring against Ireland.
'He's a player who deserves to be at a World Cup.'