Form displays as two narrow columns

You aren't doing anything wrong. Gravity Forms uses the available content space to output the form. Your available content space is fairly narrow and so the left aligned field labels don't have as much space to work with so the text wraps.

If you are using long field labels you should use top align field labels instead of left align field labels. Then you don't have the space issue. Left aligned field labels are only typically useful when the field labels are short and to the point (ex. Name, Email, Phone, etc.). If you are asking questions, top align labels make more sense.

You can change your field label placement by editing your form settings and selecting top aligned from the Label Placement option.

See this screenshot: http://grab.by/6RZk

The issue is your WooThemes theme has hardcoded the label placement in it's stylesheet.

You need to edit your themes style.css file and change line number 469 which looks like this:

.gform_wrapper .top_label .gfield_label { display:block;float:left; padding-right:20px; width: 100px; margin: 5px 0px 4px !important; }

Change it to this:

.gform_wrapper .top_label .gfield_label { display:block;padding-right:20px; width: 100px; margin: 5px 0px 4px !important; }

This should fix the issue. Your theme is telling it to float the field label to the left, so that needs to be removed.