Actually, text wrapping in RadGrid is enabled by default, so you don't need to enable it specifically. (here is how to disable it if you want to
Most probably, the unexpected behavior of the control in your case is caused by the fact that in some circumstances (e.g. enabling features like column resizing, grouping, setting column widths, etc) causes the TableLayout of the RadGrid MasterTableView to be set to "Fixed". In this case the width of the MasterTableView automatically is set to match the width of the RadGrid control and all columns shrink to fit in the available space.
You can change this behavior by setting widths to all columns or setting some larger width (in pixels) to the MasterTableView.
Let us know if you need more information.
All the best,
the Telerik team