Are dogs related to wolves?

Domestic dogs and wolves are the same species, just a different subspecies. Dogs are, basically, domesticated wolves.

Yes, wolves are related to dogs. They all come from the canine family. Dogs descend from wild wolves and they share lots of behavioral traits such as marking territory and barking just like cats are related to lions. They are all part of the Feline family.

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The above is partially misleading. Almost all animals mark territory and wolves do not in fact bark as domestic dogs do. It really isn't quite so simple. While they are from the same overall family [Canidae] they are in fact from very distinct branches. The wolf is from Lupine, the fox from Vulpine and the Dog from Basal.

Latest genome research has revealed that the common ancestor of wolves and dogs was a large wolf like creature that lived in Europe between 9,000 and 34,000 years ago. However so much time has passed and genetic shift occurred that dogs today are in fact more closely related to each other than they are to wolves. They are at best very distant third cousins.The difference thus is less like a domestic cat and a lion and more like humans and orang utans.

The study by Adam H. Freedman and published in PLoS Genetics is easily found online and will offer a more detailed examination of the latest research including insights into the domestication of dogs.
dogs are descendants of wolves
Dogs actually desend from wolves
Yes, dogs are more domestic than wolves but they are related to wolves. It's like how cats are related to tigers and lions.