An effective field theory is derived that describes the quantum critical behavior of itinerant ferromagnets in the presence of quenched disorder. In contrast to previous approaches, all soft modes are kept explicitly. The resulting effective theory is local and allows for an explicit perturbative treatment. It is shown that previous suggestions for the critical fixed point and the critical behavior are recovered under certain assumptions. The validity of these assumptions is discussed in the light of the existence of two different time scales. It is shown that, in contrast to previous suggestions, the correct fixed point action is not Gaussian, and that the previously proposed critical behavior was correct only up to logarithmic corrections. The connection with other theories of disordered interacting electrons, and in particular with the resolution of the runaway flow problem encountered in these theories, is also discussed.