  In the framework of perturbative algebraic quantum field theory a local
construction of interacting fields in terms of retarded products is performed,
based on earlier work of Steinmann. In our formalism the entries of the
retarded products are local functionals of the off shell classical fields, and
we prove that the interacting fields depend only on the action and not on terms
in the Lagrangian which are total derivatives, thus providing a proof of
Stora's 'Action Ward Identity'. The theory depends on free parameters which
flow under the renormalization group. This flow can be derived in our local
framework independently of the infrared behavior, as was first established by
Hollands and Wald. We explicitly compute non-trivial examples for the
renormalization of the interaction and the field.
