I am confused about how the IntelliJ IDEA with android plugins competes with Android Studio. I thought that Android Studio is suppose to replace IntellyJ for android development.
Android Studio is built off of the codebase[0] from IntelliJ 13. The JetBrains products like RubyMine, WebStorm, and seem to be built off of the same core IDE with plugins for languages/platforms and features. So most of the functionality is really just in plugins, and of course IntelliJ probably offers additional Android development functionality for a price.
A: No. Android Studio and the Android plugin for IntelliJ IDEA are built from the same code, and all of the changes in Android Studio are, and will continue to be, available in IntelliJ IDEA releases.
It's a fork in the sense that it's a fork of the IntelliJ repo with Google/Android related assets added. So it's more of a branding fork than a code fork, but since its in a different repo I'd still call it a fork. But it's just terminology I guess.
[0] http://www.jetbrains.org/pages/viewpage.action?pageId=983211