Yeah you are very right about torque, but you got it a bit wrong with few things.
- 525d can not be compared to a city or corolla because it is diesel and naturally all diesels have wat more torque than its equivalent petrol engine, you should compare corolla's and city with "i" variants that are petrol, and still you are damn right, even they have better torque which help engine a lot in fuel consumption.
- The turbo system you stated is "twin turbo" system, there are 2 types of twin turbo's sequential and parallel, and the one you mentioned is a sequential turbo, in such type of system, one turbo gets activated at single time, and turbo is always always related to RPM, not speed, at low rpm one turbo engages and in the other half the second one engages shutting down the first one. This setup is mostly used over parallel turbos because it has a more wide power band, like at low rpm turbo is always there and at high rpm it is there too, unlike the parallel turbo in which both the turbo kick at the same time providing more violent thrust.