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Effective field theory (EFT) is the framework for describing physics at a given energy scale without knowing the complete theory at higher energies. You write the most general Lagrangian consistent with the symmetries, organized by operator dimension. Higher-dimension operators are suppressed by powers of the high-energy scale Lambda, making their effects systematically small at low energies.
Effective field theory is perhaps the most important conceptual framework in modern theoretical physics. The central idea is that you do not need to know the complete theory of everything to make precise predictions at a given energy scale. You need only write down the most general Lagrangian consistent with the symmetries of the problem, organized by the dimension of the operators. Low-dimension operators dominate at low energies; high-dimension operators are suppressed and can be neglected to any desired precision.
The classic example is Fermi's theory of the weak interaction. At energies far below the W boson mass (80 GeV), the W propagator is effectively a constant, and W exchange looks like a local four-fermion interaction with coupling G_F approximately 10-5 GeV-2. Fermi's theory is non-renormalizable (the four-fermion operator has dimension 6), but it makes excellent predictions for nuclear beta decay, muon decay, and neutrino scattering -- all processes at energies well below M_W. At energies approaching M_W, Fermi's theory breaks down and must be replaced by the full electroweak theory. The EFT tells you its own domain of validity.
The organizing principle is dimensional analysis. In four spacetime dimensions, the Lagrangian density has mass dimension 4. An operator of dimension d is multiplied by a coefficient of dimension 4 - d. For d > 4, this coefficient has negative mass dimension and is suppressed by powers of a high scale Lambda: c ~ 1/Lambdad-4. At energies E << Lambda, the contribution of a dimension-d operator is suppressed by (E/Lambda)d-4. This is why the Standard Model (which contains only dimension-4 operators at leading order) works so well: any new physics at a high scale Lambda manifests only through tiny corrections of order (E/Lambda)2.
The modern view is that all quantum field theories are effective. The Standard Model is an EFT valid up to some unknown scale. General relativity is an EFT of gravity valid below the Planck scale. Chiral perturbation theory is an EFT of low-energy QCD. In each case, the theory makes precise, testable predictions within its domain of validity, and its breakdown signals the onset of new physics. The EFT framework converts what was once seen as a deficiency (non-renormalizability, ignorance of high-energy physics) into a virtue: systematic, controlled approximation with quantifiable uncertainties.