Citadel is the capital of the Empire, and the home of its ruling High Council. The city surrounding Inoccia is generally referred to as Citadel, while Inoccia itself is generally not spoken of, as only those of the highest blood and ranking within the Empire are permitted inside. Inoccia was carved from the bones of I'noc himself, while the rest of the Citadel was built around it, inside the Crater of I'noc, where his body fell after taking the fatal blow from Rannoc.
Inside the Crater of I'noc -
Citadel is a densely-packed city, with a fairly traditional class structure that puts the wealthy nobles at the top, and everyone else at the bottom. Due to the Empire's strict control of trade, there is little room to move between classes, and the nobles rarely find their social status shifting. Recent events surrounding one family did lead to the loss of several Imperial ships and the execution of those participating in the coup, but officials claim it will not affect security.
Inoccia is a massive tower carved from the bones of the dead god, I'noc. Inoccia sits inside the crater created when I'noc fell, and is the central feature of the city proper (which is itself known simply as 'Citadel').
The tower was created by the first Imperial wizards after the Empire secured the known world for mankind. Pooling much of the available Godsblood, the wizards worked until their bodies failed them, creating the seat of Imperial power that is the Citadel.
Today, it is purported to be the home of the Empire's ruling council of wizards, the High.
While citizens of the Empire have been raised to believe that the makeup of the council changes from time to time, this is not the case. The wizards that once made up the council have long-since died, and their consciousnesses were transferred into a sort of rudimentary hivemind.
The process was not perfect, and infected the ancient bones of I'noc with an intelligence made from an amalgamation of the most powerful human wizards in the history of the species.
TL;DR: Inoccia is a tower built from the polished bones of a dead god and infected with a mad intelligence that controls the direction and policies of a world-spanning empire.