The top-ranked Englishman had compared the two players on Wednesday before the start of the Dubai World Championship. But he backtracked on his assessment a day later and said on Twitter that he had meant no "disrespect" to Woods.
"A few people aren't understanding what I meant. The word 'talent' and Rory, to me, means a free-flowing swing who makes everything look so easy," Donald tweeted. "TW (Woods) has always been the best at getting the ball in the hole when it mattered the most. That's not just talent (that's) something else, too."
Donald tweeted again a short time later that Woods "is still the greatest player I played with."
On Wednesday, when asked if McIlroy was the best player he ever played with, including Woods, Donald said the 22-year-old Northern Irishman topped the list.
"I believe so, yeah. Just in pure talent," Donald said. "I think Tiger's work ethic has always been tremendous and his mindset as well. I think his mindset is what has separated him from the field when he was really at the top of his game. But in terms of talent, I think Rory has more talent."
Donald's comments comes as Woods is enjoying a resurgence, having won the Chevron World Challenge on Sunday to end a two-year title drought that began shortly after his personal life imploded.
His victory was welcomed by many of the other top names in golf, including McIlroy. He said he would relish the chance to face Woods since showing signs of returning to his old form. The third-ranked Lee Westwood also welcomed back Woods, calling him "the biggest name in golf and probably one of the biggest names in world sports."
Asked on Thursday about Donald's comments, McIlroy smiled and said the Englishman "was maybe taken a little bit out of context."
"Look, it's one thing to have talent but it's another to actually have the capacity of turning that talent into something productive," McIlroy said. "I think what Luke was saying was golf comes as easy to me as it does for Tiger. I'll never know but, look, Tiger's won 90-whatever tournaments worldwide and 14 majors, and that's definitely more of a talent than five wins."
Donald and McIlroy are battling it out for the European money title. Trailing Donald by just under $1 million, McIlroy must win the Dubai World Championship and hope his rival finishes outside the top nine to capture the title.
Should Donald claim the title, he would be the first golfer to win both the European and American money titles.