The concept of Action Competence (AC) has been interpreted in different ways in various domains of the educational sciences. Given the rising scholarly attention to AC, these diverse interpretations are problematic because they hinder a common understanding of the concept among scholars. We unravel the interpretation of AC as a competence of people versus that of an educational approach. We call the latter education for sustainable development (ESD), and discuss the approach as predominantly being a subjectification model of education. Furthermore, we offer an updated and refined generic definition of action competence as a competence of people. To this end, we develop an ecology of psychological concepts that underpin AC. We present a theoretical perspective based on the concepts of “action” and “competence”, for stronger consideration of AC as a competence of people. We relate this generic concept of AC to concepts such as commitment, passion, knowledge, and self-efficacy for solving controversial problems. Finally, we introduce the specific concept of “Action Competence in Sustainable Development” (ACiSD) to articulate the competence of people to engage in solving sustainability issues.