Turkey uses metaphors about "fascism" because it is worried about the future of its European friends and hopes they will remember their bloody history and not fall into the trap of Nazism, Deputy Prime Minister Numan Kurtulmus says.
Speaking at a news conference on Monday, Kurtulmus also said European countries need to take measures against racism.
His comments will likely deepen tension with Europe, particularly Germany, which is growing increasingly frustrated by Ankara's references to its wartime past.
Ties between Turkey, Germany and other European countries have deteriorated in recent weeks amid growing tensions over the April referendum vote and concern over an increasingly authoritarian tone from Ankara.
German Chancellor Angela Merkel demanded again on Monday that Turkey stop comparing bans on rallies by Turkish officials to Nazi tactics, and said her government reserved the right to block future appearances by ministers unless Ankara complied with German law.
"My demand that Turkey should stop Nazi comparisons remains in force, with no ifs or buts," Merkel told reporters at the CeBIT technology fair in Hanover.
"Unfortunately, we have observed that these comparisons have not stopped, and we will not tolerate that every taboo is broken."
Merkel said the German foreign ministry had warned Ankara in an "unambiguous" diplomatic communication, or "note verbale", in recent days that Turkish politicians could speak in Germany only if they complied with the country's law, which explicitly bans malicious disparagement of the German government.
If laws are violated, "the German government reserves the right to take all necessary measures, including a re-examination of all appearances approved as part of the diplomatic communication," she said.
Merkel's spokeswoman told a regular government news conference that "Nazi comparisons are unacceptable in any form", adding that it was up to Turkey to tone down its rhetoric and avert damage to relations between the two countries.
Erdogan had said in a speech in Istanbul on Sunday: "Merkel, now you're applying Nazi methods. Against my brothers who live in Germany, and against my ministers and lawmakers who visit there. Would this suit the ethics of politics? Your mission is not to support terrorist organisations, but to extradite them."