Fantastic question! Just as people are interested in understanding the history of their own families (cousins share one set of grandparents), they are also fascinated by questions about the deeper relationships of organisms.

Suppose you're visiting a zoo and had never seen a Giant Panda before. You might ask, "What's a Giant Panda?" The zookeeper would explain, Giant Pandas are an unusual species of bamboo-eating bears. Immediately you have a much better idea of what the Giant Panda truly IS--an unusual bear. Being a bear also means that millions of years ago Pandas and other bears shared a common ancestor.

Your question about lizards and dinosaurs is very similar. In a way, you're asking what IS a dinosaur, and what other animals are dinosaurs closely related to?

Paleontologists have determined that dinosaurs are a group of reptiles (living reptiles include such special subgroups as turtles, crocodiles, snakes, "lizards," and--believe it or not--birds. Many extinct reptiles are known only as fossils, for example, bird-hipped dinosaurs and ichthyosaurs).

Leaving aside the tricky issue that in addition to being reptiles, birds are also dinosaurs (just like poodles are dogs and also mammals), the nearest living relatives of dinosaurs naturally are another group of reptiles (crocodiles). Together, crocs + dinosaurs are called archosaurian reptiles.

Next we can ask, what's the nearest living relative of archosaurs? Again, this is another subgroup of reptiles, namely "lizards" (plus their limbless cousins, snakes). Collectively archosaurs + "lizards" + snakes are called diapsid reptiles.

So....to finally get to your question, Vairavan, "lizards" and dinosaurs are related by virtue of sharing a common diapsid ancestor hundreds of millions of years ago (just as you are related to your siblings through your most immediate "ancestor," your parents).

You probably weren't expected such a complicated answer, but that's what makes science fun, the unexpected!

Lizards and dinosaurs are both reptiles, but apart from that, they are not closely related. Lizards are members of a group of reptiles called lepidosaurs, which also includes snakes and tuataras. Dinosaurs are members of a group of reptiles called archosaurs, which also include crocodiles and pterosaurs. There are a couple of other reptile groups, one is the turtles, and the other is the extinct euryapsids, many of which were marine.

All living dinosaurs (i.e. birds) are warm-blooded, and it's probable that most of the extinct dinosaurs were, too. Crocodiles can switch back and forth between being warm-blooded and cold-blooded. Additionally, dinosaurs and crocodiles have a four-chambered heart while lizards have only three, and crocodiles and dinosaurs have maternal care of the young.