It's about BOPE, the special operations unit of Rio de Janeiro police. The first is about the military anti-gang exploits, the second is a good hard look at what corruption looks like. The drugs aren't going away if you break up a cartel, neither is the money.
Along with Elite Squad, these movies are simply amazing.
Wagner Moura. the main character in Elite Squad, also stars as Pablo Escobar in Netflix's original series Narcos.
I felt City of God occasionally seemed to have some sympathy for the subjects... but other times treated them like characters and video game NPCs...
I wrote a little extra about the amazing story behind the film here:
http://webiphany.com/2010/12/14/is-brazil-finally-ready-to-f...
tl;dr: the movie was leaked to the internet before widespread theatrical release to prevent police censorship and still became a financial success. It's a moment in Brazilian internet history that is important to know about.