Lots of factors involved in shooting very small groups, and even more so with a slow action like the TC's. But they can be overcome with technique and lots of practice.
All else being equal, the 204 will shoot flatter than the .223 giving it a slight edge for better possible precision. However either is possible to get 1/2" groups out of with a custom barrel, well tuned loads, a tuned frame/trigger AND good shooting technique with this style of action. It's also possible with factory barrels, although you'd have an easiler chance with custom barrels IMO.
I no longer own/shoot the Encores, but many of my tuned Contenders with premium barrels and tuned loads will easily average sub MOA, some 1/2 MOA or better more often than not.
IMO-YMMV