You don't really need to call "git init" before cloning a remote repository. You can simply call "git clone " and git will create it.
Alternatively, you can simply click on the "New" button on Toad's Git login window. On the "Create Repository" window, then just select "Clone an existing repository", enter your repository location and a root working folder for the local repository and click OK.
Toad will clone the repository for you and add it to the login window. I suspect the reason you're probably getting an error is because you're local repository doesn't line up with the remote repository and is causing confusion within the Git database.