With Family Guy, American Dad! and The Cleveland Show all under his wing, Seth MacFarlane is one of the most successful adult animated showrunners of his generation. Despite each show following a similar formula of an exaggerated American family with talking animals going through trials and tribulations in both the relatable and absurd, they still manage to distinguish themselves from one another. In an era where shared universes are popular, it's generally accepted that these three series take place in the same universe. However, according there's a fan theory that Family Guy is more vital to American Dad's existence than previously thought, and it's all thanks to Stewie.
The Family Guy episode that makes this theory believable is the famous two-part special named "Stewie Kills Lois" and "Lois Kills Stewie." In these episodes, Stewie believes he finally killed his mother and takes over the world; however, Lois lives and kills Stewie.
Just as the audience thinks that this consequential episode is going to have a huge effect on the rest of the series, a moment of Deus Ex Machina occurs. It's revealed the entire episode was a simulation Stewie ran under his own creation. This makes everything the audience just witnessed, as Brian Griffin points out, meaningless.
The simulation may seem pointless at first, but there is a moment within it that hints at how "real" American Dad! is. When Brian and Stewie infiltrate CIA headquarters to take over the world's power grid, they are confronted by Stan Smith and Avery Bullock. By the time of their arrival, Stewie already has the world's power shut down, so Stan and Avery give into Stewie's demands.
Stan and Avery are only in the episode for that one scene, but by the end, it turns out they exist in Stewie's simulated universe. Perhaps instead of co-existing with Family Guy and The Cleveland Show, American Dad! really exists inside of Stewie's simulation. Thus the Griffin infant is the mastermind behind the wacky world of the Smiths.
While Family Guy has plenty of absurdity, American Dad! has just as much, if not more with a talking goldfish and an alien living with the Smith family. The crazy adventures the family puts themself through are like ridiculous science-fiction stories that make more sense when they are from the imagination of a baby. By this logic, every episode of American Dad! is Stewie himself running a new simulation starring the Smiths.
The "living inside a simulation" fan theory is common and can be applied to anything, but the idea that American Dad! lives inside an existing simulation to their crossover companion show has some merit to it. If American Dad! were to end, revealing that it was a simulation created by Stewie would be a hilarious way to go out.