Beijing had announced the drills last week, further ramping up tensions following stark warnings against any independence moves by the self-ruled island which China sees as its sovereign territory.
Vessels had been told to avoid a certain area off the Chinese mainland's coast, triggering speculation that a flotilla spearheaded by China's sole aircraft carrier would take part in the exercise.
But Taiwan's defence ministry said Wednesday that the drills only involved land-based artillery conducting "routine" shooting practice.
Beijing has yet to release any information about the drill, which Chinese authorities had said would run until midnight, without giving any details about which military equipment or personnel would be involved.
"China deliberately released fake information to exaggerate it, to make it sound huge when in fact it's small," Taiwanese defence ministry spokesman Chen Chung-chi said.
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