So, I'm really confused.

I fought a war against the Assyrians and it seems like I took their last city, thought when I took the last city near me they appeared to have settled another one over by another player, but that city disappeared after a while, so I assumed the other player took that city, now I've tried to get that captured city to build things in order to be useful to my empire but it told me that the city is occupied by me, okay fine  maybe after a few turns it will stop being annoyed and I can use the city, but it's been dozens of turns and it has continued saying that the whole time. The Assyrians don't want to take a fair peace deal, the only way they will take a peace deal is if I give them the city back, which I don't want to because that's the whole point I took the city to own it. So I thought okay, maybe Assyria has other cities in the fog that I can't see. So I make boats to go find the cities but now that my empires war support has fallen so much, I go and check our relationship with Assyria and decide to check my history with them and I notice that the game has been spamming me that I have "Captured the last city of that empire". so now I'm even more confused.

Am I not allowed to wipe a empire off the planet completely? Do I have no other choice but to take the peace make them my Vassal and give them the city I wanted back?

Help.