Some dogs are actually quite a bit larger than wolves, e.g. Great Pyrenees.
For me it sounds odd in Polish also. It would be better to say "Wilk to tylko duży pies" (A wolf is just a big dog). It would indicate that there is no need to fear the wolves since they are only dogs. [sorry for my English ;)]
This is an odd sentence! In English it's not true at all, since "dog" does not include wolves. ("Canine" does though.) Does „pies” really include both dogs and wolves?
Well, dogs come from domesticated canids (including wolves). The whole family is called in Polish "psowate".
Okay, so „pies” is just much broader than English "dog". Good to know! I know that categories really vary between languages, and even between modern and historical use in the same language, but it's hard to figure them out in a new language without an instructor providing that usage context.
The word "pies" is usually understood as "domestic dog": https://en.wikipedia.org/wiki/Dog. According to Oxford dictionary even in English the word "dog" has broader meaning and can refer to a wild animal of the dog family (Canidae): http://www.oxforddictionaries.com/definition/english/dog
Actually no, it's one of those weird sentences that Duolingo loves, which in this case is misleading. No one would normally refer to a wolf as "pies", similar as in English. Even if it is technically true from a scientific view point, as wolves and dogs are considered to be subspecies, not separate species (and the Latin name of this species is "canis lupus", literary "dog wolf").
Although you could say "Wilk to duży psowaty" ( A wolf is a big canid).
On a related note "Lew to duży kot" (A lion is a big cat) would be a perfectly normal sentence.