Faithful generation in large language models (LLMs) is challenged by knowledge conflicts between parametric memory and external context. Existing contrastive decoding methods tuned specifically to handle conflict often lack adaptability and can degrade performance in low conflict settings. We introduce CoCoA (Confidence- and Context-Aware Adaptive Decoding), a novel token-level algorithm for principled conflict resolution and enhanced faithfulness. CoCoA resolves conflict by utilizing confidence-aware measures (entropy gap and contextual peakedness) and the generalized divergence between the parametric and contextual distributions. Crucially, CoCoA maintains strong performance even in low conflict settings. Extensive experiments across multiple LLMs on diverse Question Answering (QA), Summarization, and Long-Form Question Answering (LFQA) benchmarks demonstrate CoCoA's state-of-the-art performance over strong baselines like AdaCAD. It yields significant gains in QA accuracy, up to 9.2 points on average compared to the strong baseline AdaCAD, and improves factuality in summarization and LFQA by up to 2.5 points on average across key benchmarks. Additionally, it demonstrates superior sensitivity to conflict variations. CoCoA enables more informed, context-aware, and ultimately more faithful token generation.