The 19-year-old striker was included in the African nation's 35-man provisional squad for the Games last month, along with fellow Premier League players such as Odion Ighalo, Alex Iwobi and John Obi Mikel.
However, with the tournament beginning on August 3, Iheanacho would miss City's pre-season preparations in Asia and the first few weeks of new boss Guardiola's reign were he to head to Rio with his international colleagues.
Furthermore, were Nigeria to progress beyond the group stage, Iheanacho would be absent for the opening of the new Premier League season so, while the teenager was prepared to answer his country's call, he is understanding of why City are keen to keep him in their fold.
"It's up to the club and country to decide what is going to happen," he said.
"If your country wants you to play, you really want to go and play as well
(But) It's not my intention to decide."
Having scored 14 times last term, the hope for Iheanacho will be that he can continue his progress under Guardiola's guidance.
"I think everyone knows about him," the Nigerian added.
"He's a great manager
He's coached great teams - Barcelona, Bayern Munich
He's done great for all the teams, I think.
"I watched Barcelona
He's a great manager, they played really well, were a great team and won trophies.
"He has a good record working with young players I think and I don't think this will be an exception
He's going to prepare the young players and they're going to improve."
Source : PA