Daun was born in Vienna, the son of Count Wilhelm Johann Anton von und zu Daun (1621-1706), who served as Field Marshal, and his second wife, Countess Anna Maria Magdalene von Althann (1635-1712).
In 1718 he lost the Battle of Milazzo during the War of the Quadruple Alliance, when Spain invaded neighbouring Sicily.
He was to prepare for the arrival of the new governor, Archduchess Maria Elisabeth of Austria, sister of the Emperor Charles VI.
The situation in the Austrian Netherlands was very difficult after the mismanagement by the previous plenipotentiary minister Hercule-Louis Turinetti, marquis of Prié.
He enforced a reform of the military organisation and administration in the Southern Netherlands, in which he incorporated the existing 'Belgian' army into the imperial forces.