In 1994, Erdős, Gyárfás and Łuczak posed the following problem: given disjoint vertex sets $V_1,\dots,V_n$ of size~$k$, with exactly one edge between any pair $V_i,V_j$, how large can $n$ be such that there will always be an independent transversal? They showed that the maximal $n$ is at most $(1+o(1))k^2$, by providing an explicit construction with these parameters and no independent transversal. They also proved a lower bound which is smaller by a $2e$-factor. In this paper, we solve this problem by showing that their upper bound construction is best possible: if $n\le (1-o(1))k^2$, there will always be an independent transversal. In fact, this result is a very special case of a much more general theorem which concerns independent transversals in arbitrary partite graphs that are `locally sparse', meaning that the maximum degree between each pair of parts is relatively small. In this setting, Loh and Sudakov provided a global \emph{maximum} degree condition for the existence of an independent transversal. We show that this can be relaxed to an \emph{average} degree condition. We can also use our new theorem to establish tight bounds for a more general version of the Erdős--Gyárfás--Łuczak problem and solve a conjecture of Yuster from 1997. This exploits a connection to the Turán numbers of complete bipartite graphs, which might be of independent interest.