Mancini was at at a loss to understand how City, who dominated the opening phase of the game, went into decline after taking a 23rd-minute lead with Emmanuel Adebayor's spot-kick.
Wolves equalised six minutes later through Nenad Milijas and then David Edwards' first goal for 14 months settled the issue after 56 minutes.
Mancini said: "We only played for the first 25 minutes. We played very well during that period of the game and had four or five chances to score.
"But then we stopped playing and Wolves deserved to win this game. It was the worst game we have played.
"I don't know why we this happened but we must regroup and understand why this happened."
Source: PA
Source: PA