"What is above the city?"
Translation:Mi van a város fölött?
In particular, if you use a question word like mi, then you must place the word van immediately thereafter or not at all.
That's a misinterpretation. There are rules, the rules are different from those in English, and they are rather complicated.
In WH- questions, the verb comes after the question word.
The focus is usually the place right in front of the verb; when you are asking a question, you are asking for this focus and so the question has to be in front of the verb :)
Why would it be "mit"?
-t is the accusative case marker.
mi is the subject of "is above the city"; there's no reason to put it into the accusative.
Because that's not an adposition; you can't use it together with a noun as in "above the city".
It's just an adverb which stands by itself.
Postpositions such as fölött must come AFTER the noun they apply to (that's why they're called POSTpositions, as opposed to the PREpositions in languages such as English which come BEFORE their noun).
a fölött város would be like saying "an ago year" in English -- the "ago" has to come after "a year", not in the middle.
Also, you misspelled fölött and missed off the accent of város.