GA pilot acting as safety pilot reported an airborne conflict during approach to MDD non-towered airport requiring evasive action to avoid a possible collision. Reporter stated that during the evasive maneuver the aircraft terrain warning sounded requiring further maneuvering to avoid obstacles.

Narrative

I was flying as a safety pilot on board the Aircraft X. The aircraft was established on an approximately 5 mile final for Runway 34 at MDD. While not actively flying the RNAV 34 approach; the aircraft position roughly corresponded to where the aircraft would be located at HIMBA; the final approach fix. I was monitoring traffic in the area and communicating on the radio the aircraft position and intentions. I had Aircraft Y in sight; and indicated that we would maintain separation (although my phraseology was not necessarily the clearest). I instructed the pilot flying to deviate to the right for traffic under the assumption that Aircraft Y would continue flying straight ahead. When it became clear that Aircraft Y was not maintaining strait and level flight; but rather turning towards my aircraft; I immediately took control of my aircraft and made a steep turn to the right with approximately 30-45 degrees of bank; followed by another steep turn to the left with roughly equal bank and a descent of 500 feet. The second turn was made for obstacle avoidance in the descent.TCAS failed to activate despite the close proximity of the aircraft; and the terrain warnings that the aircraft is equipped for did activate (there are numerous towers and high rises in the vicinity). These warnings were addressed immediately.It is impossible at this juncture to say whether communications were a contributing factor; as there was no readback on the radio call indicating that my aircraft would be maintaining visual separation; nor was there any further communication from Aircraft Y at any point.