The Papal States are a rather poor exemple of a theocracy. Besides having the Pope as a chier of state, there was not much to differentiate them from the other Italian states of the period. I see it as more of a "personal union" of church and state, and not a fusion like in a true theocracy. And besides, the Pope would have liked to be the soverign of all Christendom, but his own followers laughed in his face because they saw the ideea as absurd, so all he got was that tiny strip of land.*cough* Papal States *cough*
The problem with building a Christian thocracy is that Christian doctrine quite explicitly requires some degree of separation between church and state (give to caesar what belongs to caesar) and even if you choose to ignore this, the New Testament simply doesn't have anything in the way of religious laws that you can base a society on. There is no Christian equivalent of Sharia. So you are left only with the option of using Old Testament law. The problem with Old Testament law is that anybody with half a brain can see that it's meant specifically for Jews. So you are left to pick and choose which laws you think still apply to you. and this is where the fun begins, because this is what all modern Christians are doing (picking and choosing) but every church, or even every individual, has his/her own choice.
Having a system where churches function like parties (as mentioned in a previous post) would be interesting, but such a system would be free of allmost all negative and dystopic connotations associated with theocracies, and would in practice be more democratic and enlightened than all majority Christian nations up to the 18-th century.