What does the IUPAC definition of the emf of a galvanic cell mean?
We think of electrochemical processes happening immediately in one step, but that's not really true. In a galvanic cell, you have to have the dissolved ions move from the bulk to the surface, adsorb to the surface, and possibly undergo an activation step before they can reduce or oxidize. The last step is for the electron to actually move from the reduced to the oxidized species. This specific step is the "local charge transfer" reaction.

You are right that when the cell reaches equilibrium, the $E_{cell}$ would be zero. However, here we're interested in  the equilibrium of each local process separately: eg. diffusion of ions from the bulk electrolyte to the surface will reach an equilibrium.

When you first submerge the electrode into the electrolyte, all of these steps are able to reach an equilibrium, and things like concentration gradients between the electrolyte bulk and electrolyte surface can effect the potential experienced by the electrode. In fact, some charge transfer even occurs initially, but because the half-cells are not connected, electrostatic forces build up and the concentrations are such that the chemical potential is quickly opposed and a steady-state is achieved.