history: A city that is a conglomerate of sin could arise form a lot of things, evolvng naturally into it's current point. Observe: wealth, trade, and power coalesce int oa great, thriving metropolis. wealth requires protection, trade requires control, power breeds pride. Side effects of success include corruption, self gratification, and conflict. People invest energy into these things, and into forms and beings (security forces, backroom deals, etc) until they lose sight of what they were originally protecting or pursuing, and control, sin, and corruption become the goal in their own right. eventually, the city, thrumming with dark power, tearing at itself and at the world around it, drains what good it has left, consuming it in a thirst for ever more ... more of whatever it desires. Thus, the beings in the city, and the city itself, look outward for more: more resources to absorb, more power to control, more good to corrupt, and it moves, leaving lifeless emptiness in it's wake in it's unending, passionate thirst.
two the city itself: well, people could have sold themselves into dark alliances, called forth demons, created alternate lifeforms, or broken reality itself a bit, becoming avatars of darkness. There are all kinds of ways to fill a city with evil. and the evil could be in objects, designs, buildings, the air itself, connections with other things, and of course, the process of consumption of good.
the system could revolve around recognizing the type of sin represented by a give n threat and seeking to counter it through resource denial, penance, replacng a wicked thing with a good thing, or outright destruction. I think, if the city is consumptive of good, though, that some form of protection would be absolutely necessary for the good things, lest you do nothing but fuel the wickedness
player town: well, this could be the source of protection for the good. Faith, prayers, and acts of goodness could be part of the process here, as well as restoring broken things, purifying corrupt things, and destroying wicked things -items and beings brought to the player town by the adventurers. thus, a mote of good could grow within the city of wickedness. of course, this would be an antigen to the city's infection, causing the city to react against the town. So we'd need a robust understanding of the holy City, and the connection fo the Holy City to the player characters and the town, in order to form a proper resistance to that. that's probably where my main interest in this kind of system wold lie.