Can a traveler lead prayer for local residents?

Yes, a traveler can lead prayer for local residents. If he shortens a four-rakat prayer to two, the residents behind him stand up after his salam and complete their own remaining two rakats. In a mosque with its own imam, though, the local imam has the right to lead unless he invites you.
Leading is about knowledge, not where you live
Islam doesn't ask whether the imam is a local or a visitor. The Prophet ﷺ said the one who leads the people should be the one who knows the Book of Allah best, and he added that no man should lead another in the place where that other man has authority (Sahih Muslim 673). So a traveler who recites well can lead a group of residents, for example at work, at a friend's home, or in a small prayer room. But in a mosque, or in someone's house, the host or the appointed imam comes first. If he asks you to lead, it's fine.
How the prayer works when the imam shortens
A traveler is allowed to shorten Dhuhr, Asr and Isha to two rakats each. The Quran mentions this concession directly:
When a traveler imam leads residents in a four-rakat prayer:
- Tell them first. Before starting, say something like "I'm traveling, so I'll pray two. Please complete your prayer after my salam."
- The imam prays two and ends with salam. He has finished his prayer.
- The residents don't say salam with him. They stand up and pray the last two rakats on their own, then end their prayer.
- Fajr and Maghrib don't change. They are never shortened, so everyone prays them in full together.
This is the well-known practice of the Companions; Umar is reported to have told the people of Makkah, "Complete your prayer, for we are a traveling group." See What is qasr prayer?
What about the opposite case?
If the traveler prays behind a resident imam, the majority of scholars say he follows the imam and prays all four rakats. Ibn Abbas called this the sunnah. So you only shorten when you lead, pray alone, or pray with other travelers. How long you stay also matters; see How many days can I shorten my prayers when traveling?
Jumu'ah and choosing to pray in full
Friday prayer is a special case: most scholars allow a traveler to lead it, while some (including many Hanbalis) say the khatib should be a resident. In practice, Western mosques have their own khatib, so this rarely comes up. Also remember that a traveler may choose to pray the full four rakats as imam to keep things simple. Most schools allow it, though the Hanafis hold that shortening is required for a traveler. See Do I have to pray Jumu'ah when traveling?
- A traveler can lead residents; recitation and knowledge decide who leads.
- In a mosque or home, the local imam or host leads unless he invites you.
- If the imam shortens, residents complete their own last two rakats.
- Announce before the prayer that you are a traveler.
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