The creators of Pokemon had their own concept on making Lugia a Psychic-Type. It was the sea guardian, but did it have to be a Water-Type? No, it doesn't have to be. You know how Lunala is a Psychic-Type too, right? Lunala is very powerful and is connected to the moon, and silver. Silver, is alchemically the moon's element. Lugia's name is derived from lutetium, a silverish element. It may also involve Lugeo (Latin for "to lie dormant"), and Luna (Latin for moon). It even came from the game called Silver and Soulsilver, where it was the mascot. Plus, Lugia's design is based off of a ton of animals. Aquatic tendencies of this legendary is from plesiosaurs, Lugia was based off of Ryujin, the dragon who lived on the ocean floor and was the Shinto god of the sea. It's avian body, coloration, and face markings were based on the grey heron, and it has the similar body shape and coloration to the beluga whale. Its back fins and tail spikes are also reminiscent of the Stegosaurus.
Anyway, the reason why it was Psychic-Type and not Water-Type or Dragon-Type, could be from the mythology it came from. Ryujin was able to control the tides with magic jewels, while Lugia merely possessed the power of the moon and controlled the tides that way with gravitational powers. Some powerful Psychic-Types are the utilizers of such gravitational forces (i.e. Gravity, a Psychic-Type Status move), and Lugia is extremely powerful, like Ryujin. It only matches Ryujin in power and abilities, but not in shape or physique, as Ryujin is a serpent god with fish scales, while Lugia has feathers and more resembles a wyvern/bird/whale mix.
Also, real world and the Pokemon world are different. They have different meanings and different culture and different physics even.
In the Pokemon world, there are so many creatures dubbed as Dragon-Types, and that's probably because of their genetics and which genes are expressed more while other genes were dormant. The reason why Charizard isn't a Dragon/Flying-Type could be that there is no expression of such genes that makes it a Dragon-Type. They're dormant, so when it mega evolves, the Dragon-Typing becomes expressed for a limited amount of time. Dinosaur Pokémon and snake-like Pokémon are in the Dragon Egg Group (with some Dinosaur Pokémon being part Dragon), and the reason why is because of their genetics being compatible with those of dragons, through having Dragon genes that are suppressed due to other circumstances (i.e.: Charizard is having his Dragon genes being suppressed so much from the other Fire-Type genes it has) or just having a compatible genetic structure.
If you compare Charizard and Dragonite, the only Dragon-Type that matches the general shape of Charizard and in its secondary typing of Flying-Type and being introduced at the same time as Charizard, you could find the picture of why Charizard wasn't considered a Dragon-Type and why it probably never will to GAMEFREAK.
Besides explaining it in terms of the meta-game, where it would screw everything over balance-wise, I'll explain it in-universe. Now, I'll talk about their physiology. The only differences between the two are that Charizard's scales are bumpy and Dragonite's scales are fish-like and even have an Ability involving them, Charizard's twin horns jut backwards and Dragonite's horn juts more forward and upward, Charizard has a flaming tail, Dragonite can fly faster, and Charizard's arms are incredibly skinny compared to Dragonite's stocky arms, and Charizard has more joints in his wings than Dragonite.
Was all that important? No. The only thing important was the lack of fire on Dragonite's tail. Dragonite cannot learn a single Fire-Type move by level-up or through breeding except for Fire Punch, and that's just igniting its fist on fire, not breathing it out. Charizard can breathe fire, making it more aligned with the fire element (especially with that flaming tail and orange coloration mostly seen on Fire-Type Pokémon).
European dragons could breathe fire, while the Eastern dragons, like Chinese and Japanese dragons couldn't, but have mystical powers instead. To Japan and China, these European dragons weren't dragons to them, but merely lizards with wings. But wait, I'm talking meta again. Let's go back to in-universe.
None of Charizard's abilities have anything to do with its scales, while most of the Dragon-Types have abilities having to do with their rock hard scales, like Marvel Scale, Multiscale, or Rock Head, or something or even have Dex entries talking about their scales. Nothing with Charizard. It only has Blaze and Solar Power, further explaining its place with the fire element.
If you look at all the Dragon-Types in the Pokémon world, none of them have fire constantly spewing from their bodies.
Charizard can learn 6 Dragon-Type moves (Dragon Dance, Dragon Pulse, Dragon Rush, Outrage, Dragon Claw, and Dragon Rage).
Now with the inspiration behind Charizard and Dragonite. Charizard is based off of a European dragon. Well, one of the many forms and iterations by the way. It is also based off of the flying lizard, and its Japanese name is Rizadon. Rizado means lizard, and don means tooth in Ancient Greek (which is commonly used in dinosaur names) or boss. More lizard.
Dragonite resembles Japanese sea dragons, European dragons, and/or fairy dragons. Dragonite's name is based off of dragon and knight, or night. Also, Draconite, which is a mythical stone said to be on the heads of dragons and are pyramidal or cone-like in shape, like Dragonite's horn. Kairyu, Dragonite's name in Japanese, is a combination of Kai meaning ocean or cheerful, Kaiju meaning monster, hakai meaning destruction, and ryu meaning dragon. More dragon.
Now, we look at the inspiration behind their pre-evolved forms. First, Charmeleon and Dragonair. Again, Charmeleon has a horn jutting backwards on his cranium, with Dragonair's horn jutting forwards and ending in a sharp point. Dragonair also has feathery gills that could also be used in flight. It also has mystical spheres on its body that could help change the weather, which could also change depending on willful thoughts or emotions. Charmeleon just has a flame still leaking from its tail. Dragonair sheds its skin like a snake to get bigger, and even has fish-like scales again, as opposed to Charmeleon's bumpy scales. Dragonair cannot learn any Fire-Type moves naturally, while Charmeleon can learn 5 Dragon-Type moves.
Charmeleon resembles a small dinosaur with Charmander's salamander-like appearance, and Rizado (Charmeleon's Japanese name), is literally the English word lizard, but translated. As for Dragonair, it is based off of sea serpents or ryu (again, means dragon). They resemble a rattlesnake (tail, and body type) in appearance while also resembling the staff of Hermes because of the snake-like body, and the wings on its head resembles Hermes' sandals. It is also based off of the imugi, which is a proto-dragon that resembles a snake and lives in water or caves (I left some other folktale resemblances and references out). Dragonair's name in Japanese (Hakuryu) could be white dragon, and it is also the name of the dragon-like companion of Zhu Bajie/Cho Hakkai from the legend of the Journey to the West in Buddhist lore. Dragonair is still based on dragons, while Charmeleon is still more based on a lizard.
Now, Charmander and Dratini. Charmander looks like a salamander with a flame on its tail, while Dratini looks like a serpent with fins and gills on its head and a rotund nose and a little dot on its forehead. Charmander knows the same 5 Dragon-Type moves, while Dratini still knows no Fire-Type moves. Charmander is predominantly reptilian and is inspired by the mythical salamander, which is a flaming salamander. Even though Charmander looks salamander-like, it is more reptilian because it lacks a metamorphose stage and simply gets bigger. It also has bumpy scales, while Dratini has serpent-like or fish-like scales. Hitokage comes from Salamander, while hi comes from fire and tokage from lizard. Dratini is based upon sea serpents or ryu, and it constantly grows like Jörmungandr, which is a serpent in Norse mythology. It is also reminiscent of the Loch Ness Monster because of its reclusive nature, aquatic habitat, and it being thought of as a myth. Miniryu is literally miniature and ryu (dragon). Dratini is still based on dragons, while Charmander is still more based on a lizard.
So, it's safe to say that Charmander and its evolutions are mainly based off of the flaming salamander, if it were ever reptilian and eventually grew wings and a nasty temper. Dratini is literally a dragon from start to finish, which is when it finally evolves into Dragonite.
I got all of my information from Bulbapedia.
I'm just using a very educated guess, as well as putting a little bit of knowledge I've gathered from 15 years of actively studying about Pokemon. This is all up for speculation, so nothing I say can be 100% correct, nor do I mean for it to be, since I am not GAMEFREAK nor the minds behind the creations of these Pokemon.
TL;DR: The Dratini line is based off more dragons in lore and appearance, while the Charmander line is based off of the fire salamanders and lizards that eventually grows wings. Charizard does look like a dragon, but is only a simple cousin to complete dragons and not all of its genetics are expressed to allow for the Dragon-Typing, or most of the genetics expressing the Fire element is suppressing the Dragon-Typing genes and making it impossible to show.
Anyway, the reason why it was Psychic-Type and not Water-Type or Dragon-Type, could be from the mythology it came from. Ryujin was able to control the tides with magic jewels, while Lugia merely possessed the power of the moon and controlled the tides that way with gravitational powers. Some powerful Psychic-Types are the utilizers of such gravitational forces (i.e. Gravity, a Psychic-Type Status move), and Lugia is extremely powerful, like Ryujin. It only matches Ryujin in power and abilities, but not in shape or physique, as Ryujin is a serpent god with fish scales, while Lugia has feathers and more resembles a wyvern/bird/whale mix.
Also, real world and the Pokemon world are different. They have different meanings and different culture and different physics even.
In the Pokemon world, there are so many creatures dubbed as Dragon-Types, and that's probably because of their genetics and which genes are expressed more while other genes were dormant. The reason why Charizard isn't a Dragon/Flying-Type could be that there is no expression of such genes that makes it a Dragon-Type. They're dormant, so when it mega evolves, the Dragon-Typing becomes expressed for a limited amount of time. Dinosaur Pokémon and snake-like Pokémon are in the Dragon Egg Group (with some Dinosaur Pokémon being part Dragon), and the reason why is because of their genetics being compatible with those of dragons, through having Dragon genes that are suppressed due to other circumstances (i.e.: Charizard is having his Dragon genes being suppressed so much from the other Fire-Type genes it has) or just having a compatible genetic structure.
If you compare Charizard and Dragonite, the only Dragon-Type that matches the general shape of Charizard and in its secondary typing of Flying-Type and being introduced at the same time as Charizard, you could find the picture of why Charizard wasn't considered a Dragon-Type and why it probably never will to GAMEFREAK.
Besides explaining it in terms of the meta-game, where it would screw everything over balance-wise, I'll explain it in-universe. Now, I'll talk about their physiology. The only differences between the two are that Charizard's scales are bumpy and Dragonite's scales are fish-like and even have an Ability involving them, Charizard's twin horns jut backwards and Dragonite's horn juts more forward and upward, Charizard has a flaming tail, Dragonite can fly faster, and Charizard's arms are incredibly skinny compared to Dragonite's stocky arms, and Charizard has more joints in his wings than Dragonite.
Was all that important? No. The only thing important was the lack of fire on Dragonite's tail. Dragonite cannot learn a single Fire-Type move by level-up or through breeding except for Fire Punch, and that's just igniting its fist on fire, not breathing it out. Charizard can breathe fire, making it more aligned with the fire element (especially with that flaming tail and orange coloration mostly seen on Fire-Type Pokémon).
European dragons could breathe fire, while the Eastern dragons, like Chinese and Japanese dragons couldn't, but have mystical powers instead. To Japan and China, these European dragons weren't dragons to them, but merely lizards with wings. But wait, I'm talking meta again. Let's go back to in-universe.
None of Charizard's abilities have anything to do with its scales, while most of the Dragon-Types have abilities having to do with their rock hard scales, like Marvel Scale, Multiscale, or Rock Head, or something or even have Dex entries talking about their scales. Nothing with Charizard. It only has Blaze and Solar Power, further explaining its place with the fire element.
If you look at all the Dragon-Types in the Pokémon world, none of them have fire constantly spewing from their bodies.
Charizard can learn 6 Dragon-Type moves (Dragon Dance, Dragon Pulse, Dragon Rush, Outrage, Dragon Claw, and Dragon Rage).
Now with the inspiration behind Charizard and Dragonite. Charizard is based off of a European dragon. Well, one of the many forms and iterations by the way. It is also based off of the flying lizard, and its Japanese name is Rizadon. Rizado means lizard, and don means tooth in Ancient Greek (which is commonly used in dinosaur names) or boss. More lizard.
Dragonite resembles Japanese sea dragons, European dragons, and/or fairy dragons. Dragonite's name is based off of dragon and knight, or night. Also, Draconite, which is a mythical stone said to be on the heads of dragons and are pyramidal or cone-like in shape, like Dragonite's horn. Kairyu, Dragonite's name in Japanese, is a combination of Kai meaning ocean or cheerful, Kaiju meaning monster, hakai meaning destruction, and ryu meaning dragon. More dragon.
Now, we look at the inspiration behind their pre-evolved forms. First, Charmeleon and Dragonair. Again, Charmeleon has a horn jutting backwards on his cranium, with Dragonair's horn jutting forwards and ending in a sharp point. Dragonair also has feathery gills that could also be used in flight. It also has mystical spheres on its body that could help change the weather, which could also change depending on willful thoughts or emotions. Charmeleon just has a flame still leaking from its tail. Dragonair sheds its skin like a snake to get bigger, and even has fish-like scales again, as opposed to Charmeleon's bumpy scales. Dragonair cannot learn any Fire-Type moves naturally, while Charmeleon can learn 5 Dragon-Type moves.
Charmeleon resembles a small dinosaur with Charmander's salamander-like appearance, and Rizado (Charmeleon's Japanese name), is literally the English word lizard, but translated. As for Dragonair, it is based off of sea serpents or ryu (again, means dragon). They resemble a rattlesnake (tail, and body type) in appearance while also resembling the staff of Hermes because of the snake-like body, and the wings on its head resembles Hermes' sandals. It is also based off of the imugi, which is a proto-dragon that resembles a snake and lives in water or caves (I left some other folktale resemblances and references out). Dragonair's name in Japanese (Hakuryu) could be white dragon, and it is also the name of the dragon-like companion of Zhu Bajie/Cho Hakkai from the legend of the Journey to the West in Buddhist lore. Dragonair is still based on dragons, while Charmeleon is still more based on a lizard.
Now, Charmander and Dratini. Charmander looks like a salamander with a flame on its tail, while Dratini looks like a serpent with fins and gills on its head and a rotund nose and a little dot on its forehead. Charmander knows the same 5 Dragon-Type moves, while Dratini still knows no Fire-Type moves. Charmander is predominantly reptilian and is inspired by the mythical salamander, which is a flaming salamander. Even though Charmander looks salamander-like, it is more reptilian because it lacks a metamorphose stage and simply gets bigger. It also has bumpy scales, while Dratini has serpent-like or fish-like scales. Hitokage comes from Salamander, while hi comes from fire and tokage from lizard. Dratini is based upon sea serpents or ryu, and it constantly grows like Jörmungandr, which is a serpent in Norse mythology. It is also reminiscent of the Loch Ness Monster because of its reclusive nature, aquatic habitat, and it being thought of as a myth. Miniryu is literally miniature and ryu (dragon). Dratini is still based on dragons, while Charmander is still more based on a lizard.
So, it's safe to say that Charmander and its evolutions are mainly based off of the flaming salamander, if it were ever reptilian and eventually grew wings and a nasty temper. Dratini is literally a dragon from start to finish, which is when it finally evolves into Dragonite.
I got all of my information from Bulbapedia.
I'm just using a very educated guess, as well as putting a little bit of knowledge I've gathered from 15 years of actively studying about Pokemon. This is all up for speculation, so nothing I say can be 100% correct, nor do I mean for it to be, since I am not GAMEFREAK nor the minds behind the creations of these Pokemon.
TL;DR: The Dratini line is based off more dragons in lore and appearance, while the Charmander line is based off of the fire salamanders and lizards that eventually grows wings. Charizard does look like a dragon, but is only a simple cousin to complete dragons and not all of its genetics are expressed to allow for the Dragon-Typing, or most of the genetics expressing the Fire element is suppressing the Dragon-Typing genes and making it impossible to show.
