Basically what you need to think about is the reason behind all religions being present and supported. You should also link it the reason the city state remains independent and as many "cool" things as you can. People evaluate whether something makes sense based on how many things they know it matches. For example creationism is widely believed in by many rational people simply because the narrative given for it matches what they already believe in.
The simplest explanation is that this is the holy city of the entire pantheon, decreed as such by the supreme god. The most likely reason for that would be that the place is where the divine domains are the closest to the mortal world. This place is where gods first came to the world and where their voices are best heard. It might be possible for divine servitors or pilgrims to even travel between mortal realm and divine domains here.
The sanctity of the place could cure diseases, remove curses, prolong life, allow creation of items that the same caster cannot create elsewhere. Whatever you think is cool and think you can sell to other people as being cool without anything breaking.
Such city would obviously be protected from mortal interference by divine power. And from gods messing up by the supreme god.
Gods would also have provided the city with some stable form of government. What exactly is up to you. This actually works in reverse. You first decide what kinds of effects you want to have and second decide what kind of arrangement produces that.
For example, the city could have a unified government or it could work like a federation or an alliance of smaller cities. It could be an empire with the church of the supreme god ruling the city as a whole but with other denominations having their own autonomous districts. A church with a district of its own might cover one or a group of gods. Same god might be worshipped by several separate denomination with separate districts. Different districts could have entirely different customs or laws in an alliance, identical customs and laws if the city is unified, or somewhat harmonized ones in an empire or federation. The city as a whole could be ruled by a single ruler such as "Lady of Pain" or "the Patrician" with their own personal style affecting the entire city or there could be a council or assembly elected by the districts or denominations. You could even have a theocratic republic.
These all produce different kinds of cities, so there is no single answer to your question. You'll have to work in reverse from desired results to the plausible causes.
That said, I think you should go with the location itself being sacred and protected by the gods as I mentioned before. There are other alternatives but they are not as stable, so there would be active politics causing that state and you would have to deal with them. This is not worth the bother unless you want to tell stories involving the power politics between faiths and governments.
From that follows that the city would be full of pilgrims, people looking for a miracle, divine spell casters looking for the extra boost of the location and such. These people and the support structures for them would have a large impact on the city and its surroundings.
A large transient population would imply good roads with services, and general tourist industry services in the city itself. Probably a system for dealing with tourists causing or getting into trouble as well.
Spell casters would support academies, libraries, guilds and trade in magical components and reagents. They would produce magic items and services and trade and commerce in these would be a major factor in the city. With its stability the city could have the best universities, libraries, and bazaars in the world.
These in turn have their own effects. Universities, academies and libraries breed scholars and students. Just because a university was founded to teach theology and magic of a particular faith does not mean it doesn't also produce the best lawyers or alchemists in the world. If your city produces and sells the best magical weapons, it probably also has lots of blacksmiths with their related trades. So you'd probably also have lots of craftsmen with their own support services.
So a city like this could balloon up very fast. Unfortunately it is still all up to you. You still need to work in reverse. First determine what kind of city you want it to be and then give it a history that produces it. For example, you might want the city to be full of past glory and greatness but decrepit right now. Add a war that disturbed the trade and pilgrimages for a few generations. Or maybe the world outside has been taken over by a newer pantheon?
This got too long and not very useful but I hope there is something you can use there.