Xenogears was originally intended to be part five of a multi-game story, but Square and the dev team had some issues yadda some stuff got changed. The Xenogears team went to Namco, Namco gave them the green light to do whatever they wanted to do, so they're starting the story from the beginning, but also changing a lot of things. Partially because Square still owns rights to a lot of the original XG content, but also because they wanted to change the story.

So you'll see references to each other, and a few similar plot points, but they aren't as closely related as many would think.