Well, chronologically it's generally agreed that it's a prequel.
The only telling reason really is 'Blondie's iconic outfit. He picks up the poncho and sheepskin jacket towards the end in TGTB&TU . At the start of the good the bad....he wears a duster jacket with a dark shirt and different hat.
His wardrobe at the start of "Fistful" and "A Few Dollars More" is the poncho get up.
First, The films were never meant to be connected.
Second, because he can't be the same character realistically. The Civil War segment in the Good Bad Ugly took place in 62-63.
A Fistful of Dollars takes place in a 1894-1898 time window from weapons used i.e fully automatic machine gun (it's a prop I know) available after 1894, to the fact that the US Army is still in Kersey Blue uniforms they didn't change to Kahki until 1898.
For A Few Dollars More has railroads in both Tucumcari and El Paso, that makes it at the earliest 1901.
Blondie would be say Eastwood's actual age 36 in GBU by the last two films he would be 74 years old.
Joe and Manco could be the same character possibly, maybe Blondie is his Uncle who taught him everything he knew and gave him the poncho to boot.
One of the things he does in Fistful is take all (or at least most of) the money he's massed up throughout the film and gives it to the family to ease their suffering.
Assuming he's the same character (it's possible he's not), then it's not unreasonable to imagine Blondie/Joe just dropping it into the laps of some poor, suffering peasants.