The upstream (testing) XORG seems to have bugs, which they cannot solve at the moment and in order to keep the system secure they have decided to modify some security settings, which in turn keeps xinit from working as it did before and especially for using it from rc.local to boot into such applications.
For the following I assume you have a script named "kiosk" in the root of your home directory (could be anything else), which is executed by xinit; usually it starts a window manager, a task bar, any start-up application etc. From the command line it could be called like this
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xinit ./kiosk
A solution for command line use is simple. You just have to add something:
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xinit ./kiosk -- vt$(fgconsole)
1) Add user pi to group tty:
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sudo usermod -a -G tty pi
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sudo nano /etc/X11/Xwrapper.config
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allowed_users=anybody
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chmod a+rw /dev/tty0
chmod g+rw /dev/tty*
su -l pi -c "xinit ./kiosk" &