The centre half, who is currently coaching and looking after the managerless team at Swindon Town, was arrested and held by Wiltshire police for twelve hours.
Williams, who has played for Reading and Millwall on loan from City, is accused of making threats to kill and actual bodily harm at a house in Swindon.
The Welshman has been bailed until December 7th whilst further enquiries are conducted.
Swindon have said that "conduct that could tarnish the club's reputation would not be tolerated" and they were monitoring the situation.
Elsewhere, former City player Gavin Strachan is training to be a journalist whilst playing at Notts County. You can read a blog he writes for the BBC here
http://www.bbc.co.uk/blogs/gavinstrachan/2008/11/on_and_off_the_metaphorical_be.html