He's singing about one of the Jacobite rebellions, either 1715 or 1745. As present research stands, it seems impossible to say which.
Donald was either a specific individual or a generic Jacobite heroic symbol. Again, as far as I can ascertain, nobody knows which.

Personally, for what it's worth, prob not a lot, I doubt that James Hogg actually wrote it (controversial statement). I will believe, until I see convincing contrary evidence, that Hogg belatedly claimed to have written it when he realised how popular it was.

I presume you are talking about Andy M. Stewart, not Andy Stewart. Ewan MacColl recorded the song in 1962, and he almost certainly got it from Hogg's "Jacobite Relics", as he repeated a mistake that Hogg had made re the ancestral home of the MacGillivary clan.

Coincidentally, there was another Thread about the song only a week or so ago in which quite a lot of background was posted.