Othonaios was born at Gytheion in 1879, and enrolled in the Hellenic Military Academy. He participated in the Macedonian Struggle with the "nom de guerre" of "Kapetan" Palamidis, and was a member of the Military League. He fought in the Balkan Wars, and sided with Eleftherios Venizelos during the National Schism, commanding the 7th Cretan Regiment in the Macedonian front of World War I. He also took part in the Allied intervention in the Russian Civil War in 1919 with the rank of Colonel. Subsequently, he was appointed Commanding Officer of the Kydoniai Division and participated in the occupation of the Smyrna district in the early stages of the Asia Minor Campaign. After the electoral defeat of Venizelos in 1920, he was dismissed from the army and fled to Allied-occupied Constantinople, where he joined several other Venizelist officers.