Intrinsic Image Decomposition (IID) is a challenging and interesting computer vision problem with various applications in several fields. We present novel semantic priors and an integrated approach for single image IID that involves analyzing image at three hierarchical context levels. Local context priors capture scene properties at each pixel within a small neighbourhood. Mid-level context priors encode object level semantics. Global context priors establish correspondences at the scene level. Our semantic priors are designed on both fixed and flexible regions, using selective search method and Convolutional Neural Network features. Our IID method is an iterative multistage optimization scheme and consists of two complementary formulations: $L_2$ smoothing for shading and $L_1$ sparsity for reflectance. Experiments and analysis of our method indicate the utility of our semantic priors and structured hierarchical analysis in an IID framework. We compare our method with other contemporary IID solutions and show results with lesser artifacts. Finally, we highlight that proper choice and encoding of prior knowledge can produce competitive results even when compared to end-to-end deep learning IID methods, signifying the importance of such priors. We believe that the insights and techniques presented in this paper would be useful in the future IID research.