Goals from Jordi Gomez and James Perch were enough for Wigan to upset City for the second time in successive seasons in the FA Cup.
City went in search of an equaliser after Samir Nasri pulled a goal back for them, but it was to no avail as they slipped to a 2-1 defeat to the team who beat them in last year's final.
City manager Pellegrini was decidedly unimpressed with his side's performance and suggested his side may have been too complacent going into the contest against the Championship side.
"I think it's the worst first half we've had in the year because we didn't have the pace to play against a team that is in a good moment," said the Chilean.
"They won five games in a row so we knew before the match we are going to play a difficult team, maybe we thought that was not going to be so difficult and when we react it was too late."
Wigan worked hard during the contest, closing City down at every opportunity.
But Pellegrini refused to use that as an excuse, insisting his side did not show as much desire as their opponents
"We knew exactly how Wigan play; it's not a tactical problem, it was a pace problem, a tempo problem," he said.
"In the last 35 minutes they continue playing the same way and we continue playing the same way.
"We had at least three of four chances to score more goals. When you don't have the same intensity it's very difficult to win."
Captain Vincent Kompany was an unused substitute while influential midfielder Fernandinho was left out altogether, yet Pellegrini insisted he was not resting players with Wednesday's Champions League return leg against Barcelona in mind.
"I didn't leave Kompany or Kolarov or Fernandino out because we have to play against Barcelona," he claimed.
"They didn't play because we are making rotation in the cup and Premier League and also because they play 90 minutes for their national squad on Wednesday. So it was important for them to have a rest."