Donnachaidh is a Celtic word meaning "children of Duncan" and is pronounced "Donnakey". Their ancestors were one of the northern Pickish tribes which resided in that part of Scotland now called Atholl in Perthshire. The descent is through the Earls of Atholl from King Malcolm II.

The first Chief was Donnachadh Reamhair, or "Stout Duncan" The original clan property was located in Rannoch, Perthshire by Loch Rannoch in the central highlands and was said to extend from the Moor of Rannoch to the gates of Perth.

One of the first accounts of the Clan was in 1306. Chief Duncan called the clan to battle in defense of Robert the Bruce, King of Scotland. Bruce was staying in Rannoch after his defeat at the Battle of Methven. Bruce was being pursued by Clan MacDougall as a result of his having killed a cousin of the chief of that Clan. The MacDougall’s declared blood vengeance on Bruce and went to Rannoch to settle the account. Two battles were fought and both were won by Clan Donnachaidh. During the second battle on Rannoch moor, Chief Duncanr was nearly captured by one of the MacDougalls, he had been spying in their camp and was discovered. To escape the grasp of his capture he let his tartan loose. Attached to the tartan was the Clan’s crest. The MacDougalls captured the crest and have it to this day.