Turkish voters will be asked whether to approve constitutional changes to create an executive presidency giving more power to the head of state.
"Mrs Merkel says they (the Germans) respect freedom of expression; the foreign minister says we have no impact on this decision, but if you look carefully at both, they do not criticise the decision" of the German towns, Turkish Justice Minister Bekir Bozdag said.
"They do not say the decision taken by the authorities is wrong," the minister added, speaking to reporters in the central province of Yozgat.
Merkel said on Friday that the decision was "taken by municipalities, and as a matter of principle, we apply freedom of expression in Germany".
In the run-up to next month's referendum, trips by Turkish politicians to Germany have come under heavy criticism as the government seeks a "Yes" vote from the huge community of Turkish expatriates.
Bozdag was due to speak at a rally on Thursday in Gaggenau in western Germany but it was cancelled, while Cologne city authorities also withdrew permission for a hall to be used for a speech by Turkish Economy Minister Nihat Zeybekci.
A third town, Frechen on the outskirts of Cologne, scrapped a rally that had been scheduled for Sunday. .
"I ask, not allowing the Turkish justice minister to speak, does it adhere or not to German human rights, Mrs Merkel?" Bozdag asked.
The turmoil in relations between the two countries has been ongoing since Germany criticised the largescale crackdown on suspected coup-plotters and those alleged to have links to Kurdish militants following last July's failed coup.
And ties have worsened following the formal arrest of Turkish-German Die Welt journalist Deniz Yucel on Monday who is accused of "terrorist propaganda".
Referring to Germany's elections later this year, Bozdag invited German politicians to come to Turkey to campaign in front of their citizens "wherever they wanted".
Turkish pre-vote rallies have also come under scrutiny in the Netherlands where Dutch premier Mark Rutte said a planned pro-Erdogan rally in Rotterdam on March 11 would be "undesirable"
When asked about Rutte's comments, Bozdag said politicians in Europe were being anti-Turkey in their quest for votes ahead of elections -- the Dutch vote on March 15 -- which he said was a "big mistake".
The justice minister accused "several" European Union countries of being against changing Turkey's governing system because they did not want it to be a strong and stable nation.