From Culture and Value, p. 32e, tr. Peter Winch:
Christianity is not based on a historical truth; rather, it offers us a (historical) narrative and says: now believe! But not, believe this narrative with the belief that is appropriate to a historical narrative, rather: believe, through thick and thin, which you can do only as the result of a life. Here you have a narrative!–don’t treat it as you would another historical narrative! Make a quite different place for it in your life.– There is nothing paradoxical about that!
The "nothing paradoxical" may be an allusion to Kierkegaard who is discussed in nearby 1937 entries. For Kierkegaard, it is is absurd that God should become man and die the death of a criminal, but this absurdity or paradox is precisely what the Christian believer must embrace. Wittgenstein appears to be rejecting this view, but also the view that S. K. also rejects, namely, that Christianity is grounded in verifiable historical facts such as that Jesus Christ was crucified by the Romans, died, was buried, and on the third day rose from the dead.
I interpret Wittgenstein to be saying that Christianity is neither an absurd belief nor an historically grounded one. It is a groundless belief, but not groundless in the sense that it needs, but lacks, a ground, but in the sense that it is a framework belief that cannot, because it is a framework belief, have a ground and so cannot need one either. Christianity is a form of life, a language-game, self-contained, incommensurable with other language-games, under no threat from them, and to that extent insulated from logical, historical, and scientific objections, as well as from objections emanating from competing religious language-games.
But is it true?
When Jesus told Pontius Pilate that he had come into the world to bear witness to the truth, Pilate dismissed his claim with the cynical, "What is truth?" Presumably, the Wittgensteinian fideist cannot likewise dismiss the question of the truth of Christianity. If it is true, it is objectively true; it corresponds to the way things are; it is not merely a set of beliefs that a certain group of people internalize and live by, but has an objective reference beyond itself.
Here is where the Wittgensteinian approach stops making sense for me. No doubt a religion practiced is a form of life; but is it a reality-based form of life? And no doubt religions can be usefully viewed as language games. But Schachspiel is also a Sprachspiel. What then is the difference between Christianity and chess? Chess does not, and does not purport to, refer to anything beyond itself. Christianity does so purport.
Here is an extended post on Wittgensteinian fideism.