I know this is going to sound strange, but this episode is really starting to remind me of "The Aztecs".
No, seriously. The City Administrator is very much in the same position as Tlotoxl--he sees himself as an embodiment of the values of his society, defending it against frauds and interlopers. As his plans to remove the contamination they represent fails, he grows increasingly desperate and is forced to do things that directly contravene those values in a purported effort to uphold them. At every turn, cognitive dissonance makes him rationalize the increasingly terrible decisions he's making (both moral and practical) as necessary to put things right.
In this case, of course, he descends further than Tlotoxl ever did. Tlotoxl only had Ixta stun Autloc; here, the City Administrator's flunky commits murder. But the same desperation that drove Tlotoxl and that has driven the City Administrator to this point drives him to what's actually a pretty brilliant set of improvisational moves. He at first attempts to frame the Doctor for the murder; then, when that fails, he frames his own flunky, uses the action as a means of improving his standing with the First Elder, then breaks his flunky back out of jail to aid him in the next step of his plan. It's actually a pretty slick trick, to the point where the Doctor, Ian and Susan's instant trust of him just seems a bit overdone and clunky instead of an act of pure stupidity and authorial fiat.
By the way, it's worth mentioning (since I feel like I have to say something about this sooner or later during this story and this is the penultimate episode) that I really couldn't tell you which one of the Sensorites is Peter Glaze without resorting to Wikipedia. (It doesn't help that the credits just call him "Third". I understand that none of them have names, but couldn't you at least credit him by rank? Oh, I suppose they change rank at least twice in the story, don't they.) Everyone who's British makes a huge deal about how Peter Glaze is in it, and how it's a big blow to the story's credibility, and how they keep expecting him to break out his loveable catchphrase from the children's series "Crackerjack!" (said catchphrase being, of course, "Crackerjack!" I guess you had to be there.) But to Americans, he's just one of the guys in suits.
I think that in some ways, this is a general benefit from not being British; we don't have these instinctive associations. We can see Beryl Reid and Nigel Plaskitt and Roy Skelton (well, hear Roy Skelton) and not immediately get thrown out of the story by remembering their other non-dramatic roles. It helps a bit if we can focus on people like Peter Glaze as characters rather than actors. Um...for those reading this who happen to be in the British Isles, maybe this helps. You know how you can watch Laurence Fishburne in 'The Matrix' without immediately thinking of him as Cowboy curtis in "Pee-Wee's Playhouse"? Yeah, it's like that only in reverse.