Balotelli opened the scoring from the penalty spot after he had been fouled and completed his hat-trick with a spot kick early in the second half.
City had all but wrapped up the game by half time by which time they had scored three times.
The Italian scored another and Joleon Lescott had headed the third as City have only lost one of their last ten league games.
They may only be top for a brief period as rivals Manchester United can reclaim the summit if they avoid defeat tonight to Birmingham.
As for Villa Gerard Houllier his team have now only won twice in thirteen league starts and are heading for a New Year relegation scrap.
Stoke, usually so dependable at home, fell 2-0 to struggling Fulham who were without an away win in 16 months.
The win lifted the Cottagers out of the bottom three and eased the pressure on boss Mark Hughes who had previously seen his side go eight games without a victory.
Two goals in the opening ten minutes decided the game, both scored by defender Chris Baird.
The Potters pressed strongly as the game progressed but Fulham held firm for a welcome three points.
A DJ Campbell brace did the damage, both in the second-half. The first just after the break and the clincher in injury time to give the Seasiders their fifth away win in their first season in the top flight.
Tottenham moved into the top four as with ten men they overcame Newcastle 2-0 at White Hart Lane.
The Magpies had defended well, if a little desperately against the Spurs attack, in the first half but were undone after the break.
Gareth Bale eased the nerves with a second late on for despite their reduced numbers the home side deserved the victory.
Rovers took an early lead through Nikola Kalinic but Jerome Thomas levelled before the break and looked to be on top.
But the quality of Morten Gamst Pedersen’s set pieces were the difference as two second half headers from the Croatian striker with his second, and Mame Diouf ensured caretaker boss Steve Kean his first win as a Premiership boss.
Kalinic then blotted his copybook by seeing red, followed later by Albion’s Gabriel Tamas as the home side went down to their third consecutive defeat having paid the price for defensive lapses.