It's completely silly whenever anyone says stuff like 'Theocracies - not dynastic at all'.
Please. It's all political. If it's political, it's dynastic. You think dynasties weren't involved in securing power for their families, albeit temporarily, under the papacy - as Cardinals and especially the pope? ANyone familiar with the Borgias, or the Medicis, the Orsinis, et al? I know these examples are later on - but that misses the point. The point is, that kind of stuff was going on since virtually day one of the papacy, for many theocracies. It's all power and influence and politics and intrigue in the end - and where there are these things - there are dynasties.
For example, just because you become pope, or cardinal, or some head of a monastic order, or whatever, doesn't mean you can't continue to play CK2. It means your game strategy, mechanics and dynamics have just *changed* during that character / life. At that point, the game can become about maneuvering ways in which your family member is elected (open elective, etc) to take your spot, or to even just switch to another family member who is inheriting family lands and titles, but while you're still a theocracy, helping them with crusades, acquiring land and power, forging dynastic alliances, etc. There could be ways to divest lands and wealth and titles to increase your piety (and thus score), meanwhile the way in which you divest it is either drectly or indirectly strategic in a way to icnrease the wealth and influence of your family. This could all actually also really spice up and throw in a change of pace every once in a while during the game, especially later on, with the potential to found your own heresies and the mechanics and dynamics of ideas surrounding that (I posted the thread on this idea earlier on in this thread).
In the end, there are tons of ways a Theocracy could play into a dynasty's hands or is part of it. This is apart from the fact that there *were* dynastic theocracies in europe during these times. Albeit how rare it was.