Brendan Rodgers' side moved two points clear of second-placed Chelsea on Sunday, but City head into the final seven games of the season with the championship in their own hands.
Although four points adrift of the league leaders, Pellegrini's City have two games in hand, meaning even a draw at Anfield along with victory in their final six matches can still see them top the table.
However, against a free-scoring Liverpool team that have won their last nine Premier League matches, Pellegrini is leaving no room for caution.
"Maybe I am wrong but I always think in the same as a manger - if you play to draw, you will lose," he said.
"So we are going to play to win. Of course, after the game, if we couldn't win the game and we draw it's a good result, but we are not going to play against Liverpool thinking we must draw.
"We don't know to play in that way. "
Liverpool also top the goal-scoring table having netted 90 times - 52 of which coming via the strike partnership of Luis Suarez and Daniel Sturridge - while City remain a close second with 84 goals and Pellegrini revealed his respect for the Reds' free-flowing style of play.
"I am very happy for football," the Chilean coach added. "For attractive football, creative football.
"That's why I think Liverpool have a lot of merits in the year they are having so far, because they are an attractive team and they always score.
"Maybe I also am wrong, but I prefer important teams, big teams, than those that just want to win 1-0 and give all the possession of the ball to the other team, score one goal and always defend during 90 minutes."
While he favours an attacking mentality, Pellegrini admits there can be consequences at the opposite end of the pitch.
However, the City manager believes they have become a well-rounded force as the season has progressed.
"We tried from the beginning of the season to play attractive football and be an offensive and creative team," Pellegrini said.
"I think the best way to win games is to score goals. But on the other side maybe at the beginning we conceded too many goals.
"In the second half of the season we have improved in defence and are at the moment a very balanced team."