How to cancel an Dialog themed like Activity when touched outside the window?

It's very simple, just set the property canceledOnTouchOutside = true. look at the example:

Dialog dialog = new Dialog(context)
dialog.setCanceledOnTouchOutside(true);

I found an even simpler answer that has worked perfectly for me. If you're using an activity with the dialog theme then you can apply this.setFinishOnTouchOutside(true); to the activity's onCreate() method.

@Override
protected void onCreate(Bundle savedInstanceState) 
{
    super.onCreate(savedInstanceState);
    setContentView(R.layout.activity_yoptions);
    this.setFinishOnTouchOutside(true);
}

Just to point out that there is a way to get dialog-like "touch outside to cancel" behaviour from an Activity themed as a dialog, though I've not fully investigated whether it has unwanted side effects.

Within your Activity's onCreate() method, before creating the view, you're going to set two flags on the window: One to make it 'non-modal', to allow views other than your activity's views to receive events. The second is to receive notification that one of those events has taken place, which will send you an ACTION_OUTSDIE move event.

If you set the theme on the activity to the dialog theme, you'll get the behaviour you want.

It looks something like this:

public class MyActivity extends Activity {

 @Override
  protected void onCreate(Bundle savedInstanceState) {
    super.onCreate(savedInstanceState);

    // Make us non-modal, so that others can receive touch events.
    getWindow().setFlags(LayoutParams.FLAG_NOT_TOUCH_MODAL, LayoutParams.FLAG_NOT_TOUCH_MODAL);

    // ...but notify us that it happened.
    getWindow().setFlags(LayoutParams.FLAG_WATCH_OUTSIDE_TOUCH, LayoutParams.FLAG_WATCH_OUTSIDE_TOUCH);

    // Note that flag changes must happen *before* the content view is set.
    setContentView(R.layout.my_dialog_view);
  }

  @Override
  public boolean onTouchEvent(MotionEvent event) {
    // If we've received a touch notification that the user has touched
    // outside the app, finish the activity.
    if (MotionEvent.ACTION_OUTSIDE == event.getAction()) {
      finish();
      return true;
    }

    // Delegate everything else to Activity.
    return super.onTouchEvent(event);
  }
}