Armed officers were deployed after one of the elderly man's relatives dialled 999 to report he was told the man was travelling to his home to kill him.
The caller told police he believed it was a realistic threat and that his relative may be able to get hold of firearms.
When he was stopped on the A9 near Inverness, four officers pointed their guns at the 91-year-old and detained him, taking him to Inverness police station. He was held for nearly six hours before being released without charge.
Police Investigations and Review Commissioner (PIRC) Professor John McNeill found officers "did not have reasonable grounds to detain the man" as a suspect for making criminal threats, having failed to complete their inquiries or obtain any additional information or evidence.
Prof McNeill was asked to assess Police Scotland's overall management and response to the incident by the Chief Constable and published his findings today.
He issued four recommendations which include reviewing the actions of some of the officers involved and providing additional training to officers in the detention, care and custody of prisoners.
His report said police found no information to indicate that the 91-year-old had committed any offence, or to support his relative's earlier assertions.
When police stopped him on November 14 last year, they did not explain the grounds for his detention and he was held in handcuffs for around 17 minutes until other officers arrived and took him to the police station.
The PIRC said the 91-year-old should have been intercepted by officers using less force, and should have been released from his detention at a "much earlier stage".
He also said the control room sergeant "did not possess sufficient information or intelligence to declare a firearms incident" and that the subsequent deployment of armed officers was not in accordance with national guidance.
The report also noted none of the relevant officers ensured the man was properly searched at Inverness police office, and that a detaining officer made "wholly inappropriate remarks" in relation to the grounds for detention.
Prof McNeill said: "In this case, there were significant failures in various police processes and I have made a number of findings and recommendations to Police Scotland to address these issues.
"These include additional training for officers involved in the detention, care and custody of prisoners which would go a long way to assuring the local population that officers at Inverness police office understand and comply with the legal requirement to make all detainees aware of their rights.
"I am also of the view that further training would be beneficial for officers undertaking the role of Initial Tactical Firearms Commander in respect of information gathering, record retention and decision making."
He also recommended that Police Scotland review police office detention procedures in respect of people detained at Inverness police office under Section 14 of the Criminal Procedure (Scotland) Act 1995.