Malcolm asks Macduff about his family to test his loyalty and see if Macduff is truly trustworthy. He pretends to be a tyrant like Macbeth to see if Macduff would still support him.
Malcolm hesitates to accept Macduff's offer of assistance because he is testing Macduff's loyalty and sincerity. Malcolm wants to make sure that Macduff is truly loyal to him and not trying to trick or betray him. Additionally, Malcolm is feeling distrustful and cautious due to the corrupt and treacherous nature of the world around him.
Malcolm promised Macduff that he would send an army to help him overthrow Macbeth.
He was testing Macduff to see if he genuinely had the interest of Scotland at heart. When Malcolm says "He hath not touched you yet" (IV, iii, 14) it means that he suspects Macduff is in league with Macbeth to take him prisoner and kill him. Malcolm then makes up all his vices to make sure that Macduff wants a good king and not just Malcolm. When Macduff responds that with his vices, Malcolm would make a terrible kind, Malcolm responds that he made the vices up and he knows that Macduff has Scotland's best interests at heart.
Malcolm told Macduff that he was greedy, and lustful and had absolutely no desire to be king. He even tried to convince Macduff to accept the opportunity to become king but instead Macduff turned down the offer and told Malcolm that despite all of his bad qualities he would still make an excellent king.
Malcom tests Macduff by saying he is going to be a horrible king. He says that this is a test to see if Macduff will continue to support him even if he was worse than Macbeth. If Macduff said he would then Malcolm would know him for a toady who would agree to anything. He then claims to be well-nigh perfect, and that he has never told a lie before the whopper he just told to Macduff. Yeah, right. Anyway, Macduff is prepared to go along with him because he would do anything to get rid of Macbeth.
Malcolm is convinced of Macduff's loyalty when Macduff reveals his grief over the deaths of King Duncan and his own family at the hands of Macbeth. Macduff's genuine sorrow and commitment to seeking justice for these atrocities proves to Malcolm that he is a trustworthy ally in the fight against Macbeth.
He says this is his way of seeing whether Macduff is a spy for Macbeth. Anyone genuinely wanting to help Malcolm to overthrow Macbeth because he believes Malcolm is better would refuse to follow Malcolm if he was actually worse than Macbeth.
Malcolm suspected Macduff of having designs on the crown and throne of Scotland. In Act 4 Scene 3, Macduff had arrived in England from Scotland. He had joined the group of discontented Scotsmen that had formed around the subsequent King Malcolm III [d. November 13, 1093]. Malcolm wanted to take the throne of Scotland away from Macbeth [c. 1014-August 15, 1057]. He wanted someone else to kill and behead Macbeth. But he didn't want Macbeth's murderer to gain the Scottish crown and throne. Malcolm knew that Macbeth had had Macduff's entire family and household murdered. So he wanted Macduff to be Macbeth's murderer. But he wanted to make sure that Macduff would do the killing only to avenge his lost family and household. He wanted to make sure that Macduff wouldn't try to claim the crown and throne as his.
Macduff goes to see Malcolm in order to persuade him to lead an army against Macbeth. Macduff seeks Malcolm's help as he views him as a legitimate heir to the throne and believes that together they can overthrow Macbeth's tyrannical rule.
The full passage is: MACDUFF. He has no children.--All my pretty ones? Did you say all?--O hell-kite!--All? What, all my pretty chickens and their dam At one fell swoop? MALCOLM. Dispute it like a man. MACDUFF. I shall do so; But I must also feel it as a man: I cannot but remember such things were, That were most precious to me.--Did heaven look on, And would not take their part? Sinful Macduff, They were all struck for thee! naught that I am, Not for their own demerits, but for mine, Fell slaughter on their souls: heaven rest them now! MALCOLM. Be this the whetstone of your sword. Let grief Convert to anger; blunt not the heart, enrage it. MacDuff has just learned from Malcolm that his entire family has been killed.
The witches show Macbeth a procession of Banquo's descendants as kings.