Actully, Xenophobia is fear of foreigners. I guess it can be used to describe a fear of strange things, but its usally used specificly for a fear of strange or foreign people ^^.
As for if Xenosaga and Xenogears are related, well thats up for debate at the moment. Technicly, I don't think Xenosaga can legally be related to Xenogears, because gears is owned by Squenix and saga is owned by Monolith Soft and Namco, so there would be copyright issues. I think the writers have stated that saga is like a "spiritial" prequal to gears, but not a real prequal. However, my theory is that the creators of the game are just being sneaky and trying to work around the copyright problem, because there are way too many similarieties between gears and saga for there to be no connection. Besides the title (why name the new series "Xenosaga" if it has nothing to do with Xenogears? ^^), there is the Zohar gold monolith thingy that exists in both games and the character Nephelim, who not only looks like Elly from Gears but even has her same taste in jewlry (episode 1 even recreates the swinging cross chaped jewlry imagery that kept repeating in Gears). There are "the Vessels of Anima" in saga that transform AWGS into more powerful AMWS, and the "Anima Relics" from Gears that transform normal gears into Omnigears; both relics and vessels are also linked to the Zohar in some way and all are named after the 12 tribes of Isrieal (sp? ^^). Finally, the most convincing similarity for me is the very brief apperance in episode 1 of a little boy named Abel, a little boy who looks EXACTLY like a certain little boy named Abel from Xenogears who plays a signifigant role in that story. but don't take my word for it, compare them for yourself ^_^.
Abel from Xenosaga =
http://www.rpgamer.com/games/xeno/xenosaga/screens/xeno_62.jpg
Abel from Xenogears =
http://ffxo.blindecho.net/avatars/abel%20avatar%203.jpg
My theory is that the Xenosaga series will set up the events that will ocurr in Xenogears without being too obvious about it.