Literacy and intelligence are related to an extent. Literacy is a big part of the education system. In order to read about subjects and be able to study them you need to be able to read. One can still be intelligent, and for example, be great at math, but literacy is a large part of being able to learn.
I believe literacy and intelligence are correlated. People must obtain facts and information somehow and more often than not, that is through reading. Yes, people can be intelligent without reading, but the lack of literacy certainly restrains them to visual stimuli. Literacy can make a person more intelligent than the visual stimulation a person comes in contact with.
It seems to me that more intelligent people would be more literate. Intelligent types would gravitate towards books and unintelligent types wouldn't. There are obvious exceptions, namely, disorders like dyslexia, which have nothing to do with intelligence. Also, there are large parts of the world that are illiterate not because they're unintelligent but because they live in a place with terrible institutions, or because of gender discrimination.
Though you would not expect to find many intelligent illiterate people in society today, literacy is a product of hundreds of years of inherited knowledge. Homer (credited as the 'author' of the Iliad and the Odyssey) could not read or write, mainly because there was no accepted alphabet or literature in the Greek world nearly 3,000 years ago. It seems unfair that this great epic poet should be deemed unintelligent simply because he was illiterate. This example shows that literacy and intelligence are not necessarily correlated.