Detect failed local login attempts
I found out the keyword to look for is AuthenticationAllowed. 

Here is an example of a bad login:

2017-03-27 14:58:52.616248-0500  localhost com.apple.AccountPolicyHelper[226]: (78.701.2) AuthenticationAllowed completed: record "testuser", result: Success (0).
2017-03-27 14:58:52.616578-0500  localhost opendirectoryd[78]: Verify password result: 5000
2017-03-27 14:58:52.616620-0500  localhost opendirectoryd[78]: ODRecordVerifyPassword failed with error 'Invalid credentials' (5000)


And this is a good login:

2017-03-27 15:02:33.444367-0500  localhost com.apple.AccountPolicyHelper[226]: (78.702.2) AuthenticationAllowed completed: record “otheruser", result: Success (0).
2017-03-27 15:02:33.444540-0500  localhost opendirectoryd[78]: ODRecordAuthenticationAllowed completed


You can find these by using the log show —style syslog -last 5m command. This will show the last 5 minutes of messages.