Van Gaal has voiced his frustration that Wales are without stars such as Gareth Bale and Aaron Ramsey for Wednesday's international friendly in Amsterdam.
Ashley Williams and James Collins are also missing from the Welsh side that will provide the Dutch with their last run out before the World Cup in Brazil.
Coleman, however, is confident his side can compete.
He said: "If we are at our best, we give them a test.
"We respect the likes of Robin van Persie and Arjen Robben - they're both great players - but we're not going in there with a fear factor. We can compete.
"It is not time for us to stand back and admire them. The next game they play after this will be in Brazil.
"It is a game of football, there is a physical element to it. We will be there to do that.
"It is something to look forward to - the arena we are playing in, the stage, against some of the best players. If you can't look forward to that we are in the wrong industry.
"We want a performance and a result. It'll be a tough game but we can learn some things about ourselves."
Coleman has not taken any offence from what Van Gaal said, with the veteran Dutch boss having also admitted he liked the way Wales play.
Coleman said: "It's obvious we want our strongest team every game, not just against Holland, but it is not always possible.
"But Louis also paid us a compliment and said we are a good team and move the ball well.
"There is nothing unusual about what he said. I'd probably have said the same if I was him."
Bale, the world's most expensive player, is the side's obvious star attraction but he pulled out with a leg injury after helping Real Madrid win the Champions League.
Ramsey, Arsenal's FA Cup final match-winner, was rested by Coleman after an impressive, but injury-curtailed, season.
Williams' absence means that Liverpool midfielder Joe Ledley, just three days before he is due to marry fiancee Lacey on the Gower peninsula, will captain the side for the first time.
"I'm incredibly proud," said the 27-year-old, who shared pre-match press conference duties at the Amsterdam Arena with Coleman.
"I appreciate there are key players missing from this camp but that doesn't take away from how much of a privilege it is going to be for me.
"It's a dream. I hadn't set a target of having this chance but I'm just thrilled to having this opportunity and looking forward to a big challenge for the team.
"Holland is a big nation in world football. They've had a long preparation looking towards the World Cup.
"We'll go in as underdogs. To play on their patch as well is always a difficult task but we have worked well and have some good players in the squad."
The match has slightly taken Allen's mind off his important business later in the week but he is looking forward to a momentous few days in his professional and personal life.
He said: "Yes, I'm tying the knot at the weekend so it's a pretty special week for me.
"I've got a huge game to come first and then it will probably hit me.
"But one challenge at a time. The weekend's to think about after the game.
"I've been looking forward to the game a long time and I want to make sure I am 100 per cent focused on that."