Before the humbling defeat at Vicarage Road, the Hornets were unbeaten in the league, having won two and drawn two of their four Premier League matches.
But Silva is not overly concerned at losing to one of the sides who will most probably be challenging for the league title this season, and would rather focus on the positive things they did as a team before the defeat to City.
"It is important we analyse the match, like we do every time," he said.
"This is a good match for us to learn something [from]. There is always something important to learn. Now is the moment to react.
"It was a bad afternoon but it was in the past and we must look forward.
"It is always important you forget nothing - the good things and the others. We did some things in the wrong way, which we need to improve.
"We need to continue doing what we did well before [the Manchester City defeat]."
Watford captain Troy Deeney, who scored 10 league goals for Watford last season, is yet to start a Premier League match this season as he has had to recover from an injury picked up at the back-end of the summer and Silva has preferred record signing Andre Gray in attack.
Silva acknowledged that Deeney is probably frustrated at his lack of first-team action but encouraged his striker, like every other player on the fringe of the action, to work hard to earn his place in the starting XI.
"I believe he wants more. Not only him, all the others [as well] and he works for that," added Silva.
"The seven on the bench and the other eight or nine [squad players] who are not even on the bench, of course they are frustrated, it is the normal way.
"Even if they stay unhappy, what they need to show - and this is what Troy and the others show - is that he wants to play in the first XI."